NEW YORK (CNNMoney) -- Hiring slowed dramatically in March, clouding optimism about the strength of the recovery.
Employers added 120,000 jobs in the month, the Labor Department reported Friday, falling far short of economists' expectations.
.staticLauncher {width:218px;border:1px solid #e8e8e8;} .staticLauncher a {font:normal 12px Arial; text-decoration:none;} .staticLauncher a:hover {text-decoration:underline;} .staticLauncher .staticLauncherHeader {clear:both; color: #000;padding:10px 10px 5px 10px; letter-spacing: -1px;} .staticLauncher .staticLauncherDek {color: #575757;font: 11px Arial;padding: 7px;}.staticLauncher .staticLauncherHeader a { font:bold 18px Arial;} .staticLauncher .imageContainer {width:218px;height:120px;} .staticLauncher .imageContainer img {display:none;position:absolute;} .staticLauncher .imageContainer img.show {display:block;} .staticLauncher .staticLauncherMore {float:right;} Obama battles job crisis The U.S. lost 4.3 million jobs in President Obama's first 13 months in office. Track his progress since then.The number marked a significant slowdown in hiring from February, when the economy added 240,000 jobs.
"It's discouraging that job growth was half of what it had been the previous month," said Christine Owens, executive director of the National Employment Law Project.
Job growth of around 120,000 is just about enough to keep up with population growth, and is therefore more like "treading water" than a major improvement, Owens said.
Meanwhile, the unemployment rate fell to 8.2% as the labor force shrank by 164,000 workers, mostly due to white women leaving the job market.
Economists attributed part of the hiring slowdown to an unseasonably warm winter that boosted job growth in January and February. The Labor Department adjusts its data to account for seasonal trends, and the warm weather may have distorted those calculations.
But still, seasonal adjustments didn't explain all of the slowdown.
"It's a reminder that the U.S. recovery is not suddenly going to transform into a spectacular success, particularly not at a time when the rest of the world economy is stumbling," Paul Ashworth, chief U.S. economist of Capital Economics said in a note.
The hardest hit industry was retail, which lost 33,800 jobs, mostly at department stores.
On the positive side, manufacturers created 37,000 jobs, professional services created 31,000 jobs, and health care added 26,000 jobs.
Restaurants and bars were also a large job creator, hiring 36,900 people.
Public sector job losses continued to slow. The government has been bleeding jobs since the middle of 2010, but recently those layoffs have started to wind down. The government cut just 1,000 jobs in March, while private businesses -- which have steadily been hiring for two years straight -- added 121,000 jobs.
Overall, the job market is still not out of the deep hole left by the financial crisis. Of the 8.8 million jobs lost, about 3.6 million have been added back.
About 12.7 million Americans remain unemployed, and 42.5% of them have been so for six months or more.
Meanwhile, the so-called underemployment rate fell to 14.5%, its lowest level in three years. This figure includes people who are unemployed, as well as those who are working part-time because they can't find full time jobs, and those that have looked for a job sometime in the last year.
Republicans react to jobs reportRepublicans seized on the disappointing numbers as an opportunity to slam President Obama's record.
"Millions of Americans are paying a high price for President Obama's economic policies, and more and more people are growing so discouraged that they are dropping out of the labor force altogether," Republican presidential candidate Mitt Romney said.
Responding to the report, the White House maintained the economy is still growing.
"There is more work to be done, but today's employment report provides further evidence that the economy is continuing to recover from the worst economic downturn since the Great Depression," said Alan Krueger, chairman of the Council of Economic Advisers, in a statement.
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