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US economy adds jobs, but at modest rate

Analysts voice concerns over sluggish recovery

Job seekers stood in line at a job fair last month in Portland, Ore.

Rick Bowmer/AP

Job seekers stood in line at a job fair last month in Portland, Ore.

The United States economy added just 120,000 jobs in March, well below the employment growth of previous months, triggering worries among economists and business leaders that the economic recovery - already painfully slow - may be flagging.

The Department of Labor also reported Friday that the nation’s unemployment rate dipped slightly to 8.2 percent, the lowest since January 2009. But economists said the decline was largely due to unemployed Americans who had stopped looking for work and were no longer counted as part of the labor force.

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The economy had added more than 200,000 jobs in each of the previous three months, and many economists had predicted that March would show the same gains. So the question for many economic observers was whether to view the lower-than-expected jobs figure as a blip in the ongoing trend of gradual employment growth, or as a more worrisome sign.

Kenneth Rogoff, a Harvard University economics professor who has studied recessions and recoveries, said predictions of big job growth in March were overly optimistic, arguing the economy is years from a full recovery.

“This report should quiet those who said we will see 300,000 and then 400,000 in job gains,’’ Rogoff said.

“We were due to come back to earth a bit.’’ The March figures, Rogoff said, prove the economy is “still showing moderate growth.’’

Sean Dowling, a manager at staffing firm Robert Half International, noted that in Boston the strongest demand for labor is in accounting, finance, and administrative positions, and that some job candidates are receiving multiple job offers. So although the March figures were far from robust, Dowling said they were in the right direction.

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“The movement is still positive, so we’ll take it,’’ Dowling said.

With the presidential election only months away, Democrats and Republicans had opposite interpretations of the March jobs report.

The Obama administration issued a statement on the White House blog that seized on the increase in jobs in the nation’s beleaguered manufacturing sector. Factories added 37,000 jobs in March, according to the Labor Department, and the White House noted that since January 2010 there have been nearly 500,000 new jobs in the sector, which it termed a “revival.’’

“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,’’ wrote Alan Krueger, chairman of the White House Council of Economic Advisers.

Republican presidential candidate Mitt Romney, who has made the economy a centerpiece of his campaign, called Friday’s jobs report “weak and very troubling.’’

“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,’’ Romney said in a statement.

Nariman Behravesh, chief economist at IHS Global Insight, a Lexington forecasting firm, cautioned against drawing any conclusions from yesterday’s numbers, saying monthly data tend to be volatile and could represent a fluke.

“My guess is we’ll see better numbers in subsequent months,’’ Behravesh said. “Up until March, the numbers were quite strong - the unemployment rate dropped from 9.1 to 8.3 [percent] in a seven-month period. That trend is pretty darn good and I hope it continues.’’

In addition to manufacturing, the food and beverage industry also added 37,000 jobs in March, while within health care, physician practices and hospitals added another 26,000 jobs. On the down side, jobs in the retail sector fell by 34,000.

The Labor Department also said the number of long-term unemployed - those without jobs for 27 weeks or more - was essentially unchanged at 5.3 million, and accounted for about 40 percent of the officially unemployed.

Meanwhile, those people who were working part time because their hours were cut back or because they were unable to find a full-time job fell to 7.7 million, from 8.1 million.

In its statement, the White House noted that some of the softness in the job market may be due to a loss of seasonal employment and the continued struggles of the construction industry.

The unemployment rate among construction workers is 17 percent, more than double the national average.

At one of Boston’s largest building firms, Shawmut Design and Construction, hiring this spring is about on par with last year - some 100 new employees. Susan Ehrlich, Shawmut vice president, said the industry is still recovering from the hard hits of the recession and the housing bust.

The economy, Ehrlich said, is moving in “fits and starts and there’s still not a huge amount of confidence. People’s legs are still shaking. . . . I think the next three to five years are going to be tough.’’

Ronald N. Cogliano, president of the Merit Construction Alliance, a trade group based in Kingston, is optimistic hiring will improve in upcoming months as public works projects get underway, and a slate of proposed real estate developments break ground.

For now, though, the March jobs report was a disappointment.

“We’re supposed to be in a recovery after all,’’ Cogliano said.

Megan Woolhouse can be reached at mwoolhouse@globe.com.

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