The economy added just 88,000 jobs in March: Are we heading for a slowdown?

The U.S. economy added just 88,000 jobs in March, the Bureau of Labor Statistics reported Friday, the lowest total in nine months and well off the nearly 200,000 many analysts had expected.

The unemployment rate edged down to 7.6 percent, from 7.7 percent, the lowest it's been since December 2008. However, the dip was largely attributed to the 500,000 people who either left the workforce or stopped looking for work entirely.

The White House tried to spin the report as the latest evidence that the economy is growing. "While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression," wrote Alan Krueger, a member of the White House Council of Economic Advisers.

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But most analysts were unimpressed, and stocks tumbled. "There were few encouraging signs from this report," says the Wall Street Journal's Josh Mitchell. "Employers added just 88,000 jobs in March, roughly a third the level of February's number and the lowest figure since June 2012. Manufacturers cut jobs. The jobless rate fell for the wrong reasons — people dropped out of the labor market."

According to the New York Times, labor force participation is now at its lowest level since 1978.

Retail took the biggest hit, cutting 24,000 jobs in March. Meanwhile, the construction sector added 18,000 jobs, a positive sign that the housing market may finally be bouncing back.

March's job growth was far short of that recorded in recent months, and less than half the average 183,000 jobs added per month in 2012. That fueled speculation that the economy may be entering a "spring swoon," a sluggish period preceded by an exceptionally strong winter.

Anxiety over across-the-board federal spending cuts — known as the sequester or sequestration — may be hurting the job market, notes Reuters' Jason Lange: "Nervousness over the cuts might have made businesses shy about taking on more staff."

However, others say the sequester may not be the culprit after all, but rather another Washington policy: The expiration of the payroll tax holiday earlier this year.

"One ominous thing is that this doesn't seem to be about the sequester. It seems to be more about the payroll tax hike as retail got creamed," says Business Insider's Joe Weisenthal. "Professional services, which would be affected by government layoffs, were up fine."

"The rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail," says Paul Krugman at The New York Times.

That the payroll tax hike could affect the labor market so dramatically has some analysts worried. It "leaves us with this overarching conclusion," says Neil Irwin at The Washington Post. "This economy isn’t as strong as we thought it was."

Still, some cautioned against drawing broad conclusions from Friday's report, because the BLS could revise the total in the coming months. As John Ryding, chief economist at RDQ Economics, told the New York Times, there's been a recent pattern of upward revisions, and a continuation of that trend could make March's tally much more encouraging. That was the case with January and February's numbers, as the BLS on Friday announced that job gains in those months had been revised up by a combined 61,000.

"One thing to remember: It's very possible that March could get revised upward," the Washington Post's Ezra Klein tweeted Friday morning. "Be careful drawing sweeping conclusions from today's."