Construction Jobs Take A Hit In March After A Fall Boost

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ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

AUDIE CORNISH, HOST:

And I'm Audie Cornish. The latest jobs numbers indicate a slowdown in the U.S. economy. A report out today from the Labor Department shows employers added just 88,000 jobs in March. That's about a third the number added the month before. The Obama administration is suggesting that across-the-board spending cuts may be to blame, and the president is proposing undoing those cuts and replacing them with more gradual deficit reduction. The budget he plans to release next week includes trims to Social Security and Medicare, a move sure to anger some lawmakers in his own party.

For more on the state of the economy and what the president wants to do about it, we're joined by NPR's Scott Horsley. And Scott, let's start with today's jobs numbers. I gather it's being viewed as a disappointment.

SCOTT HORSLEY, BYLINE: It really is, Audie. In January and February, the job market seemed to be gaining traction. In February alone, employers added 268,000 jobs. But these number suggest last month, employers just hit the brakes. Now, there are some private economists who say you can't blame the government spending cuts known as the sequester for that because it's just too soon for those cuts to have shown up in the job market.

But the Obama administration, which has long criticized the spending cuts, is not so sure. Here's White House economist Alan Krueger.

ALAN KRUEGER: I think we can say that the sequester is going to weigh on the economy; whether it started already is a question. Certainly, some employers tell us that it's affecting them. It's causing pain for a number of federal workers. It's causing difficulty for people who depend on government services. It's going to cut key investments in research and development and health, which will hurt our economy in the future. So the longer it stays in place, the more damage it's going to cause to the economy.

HORSLEY: Krueger points to the Congressional Budget Office forecast, which said the government spending cuts will reduce economic growth this year by about 750,000 jobs.

CORNISH: Now, one area where we saw a drop in job growth in March was construction. What does that signal?

HORSLEY: Well, right. That's a sector of the economy which was really hard hit during the recession, and we saw very high unemployment among construction workers. But the housing market has finally begun to recover. Starting last fall, we saw an uptick in construction employment. Since September, in fact, we've added 169,000 new construction jobs. But construction hiring, along with other parts, slumped in March.

And this is an area where the president says the government could really help. He's been calling on Congress to spend more money on public works projects - building things he says the country needs and at the same time, putting some of those idle construction crews back to work.

CORNISH: Right. This is one of those proposals we'll see in the president's budget next week. And, I mean, it seems like we're basically getting a sneak preview.

HORSLEY: Right. And one of the things that we're being told the budget will include is the president's last deficit-cutting offer to House Speaker John Boehner, the offer he made back in December. Now, that offer included some things that the president's fellow Democrats don't like - like cuts to future Medicare spending, slower cost-of-living adjustments in Social Security payments. But the White House has made it clear, those sacrifices for the Democrats would have to be accompanied by a sacrifice on the Republican side, namely higher tax revenue. Here's White House spokesman, Jay Carney.

JAY CARNEY: The president believes that the entitlement reforms he put forward to Speaker of the House John Boehner late last year are acceptable within the context of a broader budget that invests in the economy, protects and assists the middle-class; it protects seniors, and allows us to grow and create jobs. The alternative approach is not acceptable. It's not acceptable to the president, and it is not acceptable to the American people.

HORSLEY: The president has argued that his vision is the one that the voters opted for last November, and he argues the Republican budget proposal is the one the voters rejected.

CORNISH: Scott, for those of us with deja vu, it seems like this same idea of a grand bargain the president's been pushing for the last two years without success.

HORSLEY: It really is. And the sticking point has not changed. It's the president's call for more tax revenue. Every time he brings that up, Republican leaders walk away from the bargaining table. So this time, the president is really sort of trying to go around those Republican leaders, and take his case directly to what the White House calls the common sense caucus. They're hoping to find at least a few Republican lawmakers who'd be willing to go along with higher revenue, in exchange for getting the entitlement savings that they've been saying they want.

So this coming Wednesday, the same day that his budget comes out, the president will be having a private dinner with a dozen Republican senators, and he'll be pitching his combination of long-term deficit reduction with some short-term spending, to goose that sluggish job market.

CORNISH: Scott, thanks for the update.

HORSLEY: My pleasure, Audie.

CORNISH: NPR's Scott Horsley speaking with us from the White House. Transcript provided by NPR, Copyright NPR.