WASHINGTON (AP) — Fewer U.S. states reported job gains in March, reflecting slower hiring nationwide.

The more sluggish job growth coincides with more people seeking unemployment benefits in the past month. The trends suggest that hiring could slow in coming months.

Job gains were reported in 29 states last month, the Labor Department said Friday. That's worse than February, when 42 states added jobs. Nationwide in March, employers added only 120,000 jobs, half the pace of the previous three months.

Economists have cautioned, though, that the hiring slowdown in March might be temporary. They noted that a warmer winter may have led to some earlier hiring in January and February. Most are awaiting the April jobs report before concluding that hiring has stalled. That report will be released May 4.

Despite the slower hiring, unemployment fell in most states in March: 30 states reported lower rates. Eight reported increases. Rates were unchanged in 12 states.

But one reason for the lower unemployment in March is that many Americans stopped looking for work. People who are out of work but aren't looking for a job aren't counted as unemployed.

The biggest job declines in March were reported in Ohio, which lost 9,500 jobs, and New Jersey, which lost 8,600 positions. Wisconsin posted the third biggest loss, a decline of 4,500.

Some states reported healthy job gains: New York added 19,100 jobs, California gained 18,200 and Arizona said employers added 13,500 jobs.

Nevada has the nation's highest unemployment rate, at 12 percent. That's down from 12.3 percent in February. Rhode Island reported the next highest rate, at 11.1 percent, down from 11.2 percent. And California has the third-highest rate, at 11 percent, up from the previous month's 10.9 percent.

North Dakota's 3 percent unemployment rate is the nation's lowest, the report said. That's down from 3.1 percent in the previous month. Nebraska has the second-lowest rate, at 4 percent, down from 4.1 percent. South Dakota has the third-lowest rate, at 4.3 percent, the same as the previous month.

The report follows some disappointing economic data Thursday. The average number of people seeking unemployment benefits nationwide in the past month has reached a three-month high. Home sales slowed last month after healthy gains over the winter. And manufacturing in the mid-Atlantic region declined in April, a separate report found.

Despite the negative reports, most economists expect modest growth to continue this year. The economy likely expanded at a 2.5 percent annual pace in the January-March quarter, down slightly from 3 percent growth in the fourth quarter.

The government will issue its first estimate of January-March growth next Friday.

Economists said temporary layoffs stemming from the spring holidays may have inflated the unemployment benefit figures. Some school employees are laid off during spring break and are eligible to file for benefits.