Modestly Good News From The March Jobs Report
March's Jobs Report was good, but could be better.
The U.S. labor force continued its modest but positive expansion in March according to the latest jobs report from the Bureau of Labor Statistics:
Total nonfarm payroll employment rose by 215,000 in March, and the unemployment rate was little changed at 5.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in retail trade, construction, and health care. Job losses occurred in manufacturing and mining.
In March, the unemployment rate (5.0 percent) and the number of unemployed persons (8.0 million) were little changed. Both measures have shown little movement since August. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (4.5 percent), adult women (4.6 percent), teenagers (15.9 percent), Whites (4.3 percent), Blacks (9.0 percent), Asians (4.0 percent), and Hispanics (5.6 percent) showed little or no change in March. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.2 million in March and has shown little movement since June. In March, these individuals accounted for 27.6 percent of the unemployed. (See table A-12.)
In March, the labor force participation rate (63.0 percent) and the employment-population ratio (59.9 percent) changed little. Both measures were up by 0.6 percentage point since September. (See table A-1.)
(…)
Total nonfarm payroll employment rose by 215,000 in March. Employment gains occurred in retail trade, construction, and health care, while job losses occurred in manufacturing and mining. (See table B-1.)
Retail trade added 48,000 jobs in March. Employment gains occurred in general merchandise stores (+12,000), health and personal care stores (+10,000), building material and garden supply stores (+10,000), and automobile dealers (+5,000). Over the past 12 months, retail trade has added 378,000 jobs.
Construction employment rose by 37,000 in March. Job gains occurred among residential specialty trade contractors (+12,000) and in heavy and civil
engineering construction (+11,000). Over the year, construction has added 301,000 jobs.Employment in health care increased by 37,000 over the month, about in line with the average monthly gain over the prior 12 months. In March, employment rose in ambulatory health care services (+27,000) and hospitals (+10,000). Over the year, health care employment has increased by 503,000.
Over the month, employment continued to trend up in food services and drinking places (+25,000) and in financial activities (+15,000).
In March, employment in professional and business services changed little for the third month in a row. In 2015, the industry added an average of 52,000 jobs per month.
Employment in manufacturing declined by 29,000 in March. Most of the job losses occurred in durable goods industries (-24,000), including machinery (-7,000), primary metals (-3,000), and semiconductors and electronic components (-3,000).
Mining employment continued to decline in March (-12,000) with losses concentrated in support activities for mining (-10,000). Since reaching a peak in September 2014, employment in mining has decreased by 185,000.
Employment in other major industries, including wholesale trade, transportation and warehousing, information, and government, changed little over the month.
The jobs numbers for January and February were modestly revised, with January’s net jobs number being revised downward from +172,000 to +168,000 and the numbers for February having been revised from +242,000 to +245,000 for a net revision of -1,000 for the two months combined. On the positive side, though average hourly earnings for all employees increased by seven cents per hour, while the average hourly work week was unchanged from February. The increase in wages is seen as particularly good sign given the fact that those numbers had been stagnant for a number of months. Additionally, while the top-line U-3 employment rate did rise one-tenth of a point that appears to be due mostly to the fact that the number of people looking for work increased, a sign that potential employees are becoming more optimistic about the labor market. Digging deeper into the data, the long term unemployment rate continues to improve while both the labor force participation rate and the employment rate increased from previously historic lows. The changes for these last three items were admittedly modest, but they were nonetheless positive.
The New York Times puts a positive spin on the numbers:
Americans are going back to work.
Powered by a burst of hiring in recent months and an uptick in wages, the huge army of workers that had been on the sidelines of the recovery is slowly returning to the job market.
The Labor Department said on Friday the proportion of Americans in the labor force crept up slightly to 63 percent — the highest level in two years. Although still well below where it should be, that represents a move in the right direction and extends a trend that began last fall.
Over all, the economy added 215,000 jobs in March, as employers continued to hire at a robust pace, despite volatility on Wall Street and turmoil overseas.
The unemployment rate rose to 5 percent, compared with 4.9 percent in February. But that was a positive indication, analysts said, since the increase in participation accounted for the jump.
Although other economic data has been mixed recently, the Labor Department report paints a picture of a remarkably steady job market. Since the beginning of 2015, the economy has added well over 200,000 jobs a month on average.
Indeed, Friday’s report suggests an economy gradually returning to a normal trajectory, like the one that prevailed before the Great Recession began in December 2007.
March’s gain was in line with that trend. Economists and traders have been equally focused on other factors in the monthly jobs reports recently, like average hourly earnings and the proportion of Americans in the labor force.
That is because one of the biggest question marks of the recovery has been why wage gains have been so modest despite the steady hiring gains. That may be starting to change.
Last month, average hourly earnings rose by 0.3 percentage point, bringing the yearly wage gain to 2.3 percent. Economists had been expecting a 0.1 percent increase, so March’s change suggests wages are strengthening.
The economic backdrop to the election is also starting to change. Democrats note that unemployment has in fact fallen sharply since President Barack Obama took office; the jobless rate stood at 7.8 percent in January 2009.
But Republicans in turn can cite stagnant wage growth, as well as the exit of many workers from the labor force in recent years, as they criticize Mr. Obama’s stewardship of the economy from the campaign trail
While the unemployment rate has been falling, until recently so has the proportion of Americans who are either employed or actively looking for a job.
In March, the percentage of Americans who are counted as part of the labor force crept up, as it has done in recent months after bottoming out at 62.4 percent in September 2015, the lowest since the late 1970s.
(…)
“The labor force in the last few months has seen significant gains,” Claire McKenna, a senior policy analyst with the National Employment Law Project, an advocacy group for lower-wage workers, said before the report was released. “Things are moving in the right direction but very slowly.”
Still, Ms. McKenna noted, the participation rate was three full percentage points below where it was when the recession began in 2007.
The falling percentage of Americans in the labor force in part reflects the retirement of baby boomers and other demographic factors, rather than underlying economic weakness.
But Ms. McKenna noted that at 77.8 percent, even the participation rate for prime-age workers ages 25 to 54 was still down two percentage points from late 2007.
“Wages and participation are where the rubber meets the road,” said Michael Gapen, chief United States economist at Barclays, in an interview before the release of the report Friday. “We will take our cue about the overall strength of the economy based on that.”
Still hanging over the economy, of course, is the question of Federal Reserve policy going forward and what impact jobs numbers such as this are likely to have on the interest rate situation. It has been three months now since the board increased interest rate for the first time in nearly a decade. Since then, though, the Fed has demurred on follow-up increases notwithstanding policy statements in December that made clear that further rate increases would be coming if the economic data justified that decision. The reluctance to increase rates in the first quarter of 2016 was likely motivated in no small part by disappointing reports about economic growth in the final quarter of 2015 as well as continued signs of economic turmoil in Asia. At some point, though, the Federal Reserve is likely to look to raise rates again, and this will especially be true if the labor market continues to improve as it has in the past three months.
The other factor at play here, of course, is the election and the fact that both parties will seek to use elements of a jobs report like this, which can classified as modestly good but far from perfect, to advance their cause. For Democrats, the increase in jobs combined with the fact that the top-line unemployment rate has declined significantly since President Obama took office. Republicans, meanwhile, have been emphasizing the lack of wage growth, the fact that long term employment and labor force participation remain stubbornly low, and the fact that job growth itself is barely at replacement level to argue that the economic could, and should, be doing much better, with some candidates arguing that their policies could lead to GDP growth closer to 4% than the 2.0% to 2.5% we’ve been experiencing since 2009. While sustained 4% growth seems unlikely, it is undeniable that the modest growth we’ve seen over the past seven years has made for one of the slowest recoveries since the end of the Second World War. Unfortunately, the kind of action that Congress could take that would impact these numbers the most, such as comprehensive tax reform that would implement pro-growth strategies, seems unlikely given the current state of gridlock on Capitol Hill. Until then, we’ll likely just continue coasting alone.
The NYT puts a ‘positive spin’ on the numbers because the numbers actually are – contrary to 6 years of Republican “the sky is falling” rhetoric concerning our economic performance – positive numbers.
I’m not sure how many people expected a high growth (4% to 5%) recovery following the worst economic crash since the Great Depression? The crash caused a loss of nearly 25% of the wealth of American households and businesses , that is, $18 trillion.
By nearly every comparative measure, our recovery since 2010 has been steady if not spectacular, with consistent growth in GDP and employment, reduction in the UE rate, reduction in deficit as a % of GDP, and growth in our equities and housing markets. Other advanced countries that followed a course of austerity or spending reductions have, contrary to the United States, experienced poor economic performance since 2009.
Unless the economy experiences a dramatic slowdown in the months leading up to the election, I believe that Obama will be judged by economists to have done well with respect to the 2008 Crash and subsequent recovery.
@al-Ameda:
I like it when down voting is quick and to the point. Happy Friday to all Republicans.
Uh, exactly what are these pro-growth tax reform strategies? Have you read the GOP candidates tax plans? It’s a disaster. Hmmm lets look at 2001-2008 – massive tax cuts massive fed rate cuts, and what kinda growth did we get out of that, must of been huge! Nope, one year of 3.8% growth in 04, when rates were low and that housing bubble thing was fueling up. I can’t believe people still drink this tax cut kool aid…
Doug, you are never, ever going to give Obama any credit for steering the economy out of the worst crisis since the Great Depression and into a period of sustained economic recovery, are you?
Now, it’s understandable why Doug doesn’t want to do this.
1. The crisis was caused by lax financial regulation ( which, as a believer in free markets and deregulation, he favored). Remember the idea of the self regulating “efficient financial market”? That idea is now as dead as a door-nail, thanks to the 2008 financial crisis. Note how Doug hardly ever refers to that crisis in these posts ? It’s because that crisis exploded so many conservative economic illusions .
2. Obama led the country to recovery by applying standard Keynesian policies – big fiscal stimulus, expansive monetary policy, major government relief for the financial and auto industry, re-imposing close regulation of the financial industry( Dodd-Frank). All of this is anathema to a libertarian like Doug, and what stings worst of all is that it seems to be working!
Doug’s response is therefore to poor-mouth the recovery, while pretending that somehow the 2008 financial crisis either never happened, or was some kind of garden variety recession.To do otherwise would be to concede that conservative economic policy failed massively in 2008, and that liberal economic policy worked to slowly restore a shattered economy. Doug can’t do that, and remain a libertarian. So we get these posts.
Cutting rich people’s taxes is always the GOP answer.
@stonetools:
As it happens, Dr. Krugman addressed Obama and the economy this morning. He also had some words to say about conservatives being blinded by ideology.
If tax cuts were all that were necessary, Kansas should be a freakin’ runaway economic WOW!
Not happening. Hasn’t happened the entire five years they’ve tried it.
And Brownback et al. still can’t admit that they were wrong.
@gVOR08:
“As it happens, Dr. Krugman addressed Obama and the economy this morning.”
Not a big fan of his fiction. Giving Obama kudos for taking ONLY 7 years to get back to GWB’s AVERAGE unemployment numbers – with a lower labor force participation rate – is pretty cringe-worthy.
“He also had some words to say about conservatives being blinded by ideology. ”
Now, THAT’S funny! Tell me another one – you’re on a roll.
@gVOR08:
Sigh. This Congress would not consider any tax plan that did not cut income taxes for the wealthy, with maybe enough spread around to others to provide cover. If there’s one thing economists (less cranks and hired guns) seem to agree on, it’s that tax cuts for the wealthy do not produce GDP growth. (OK, technically IIRC, they do, but too small and too far down the road to matter.) All we’ve done since Kennedy has been to cut taxes for rich people. Where are the fracking jobs, Doug?
If Congress wanted to improve the economy, they would have done what Congresses did in every recession from Nixon through W.. What Bernanke kept begging them to do through this recession. Fiscal stimulus.
Wealthy Job Creators™ do not create jobs. Aggregate demand creates jobs. Buy something. Spend money. Give money to poor people who will immediately spend it. There really are some problems that can be solved by throwing money at them. If you’re fixated by the deficit, then tax rich people to control it. Yes, taking money from rich people and giving it to poor people would have helped. Marginal propensity to spend.
I’m not an economist, I just rant about it in blog comments, but a couple of notes may be in order:
– Supply side tax cuts can work. Kennedy’s did. It’s a matter of timing and conditions. The lesson of Kennedy’s cuts isn’t that supply side tax cuts work. The lesson is that Democrats know how and when, and Republicans do not.
– The real magic in stimulus is the multiplier, which really only works if interest rates are effectively at the Zero Lower Bound. It may now be too late. But it was a yooooge lost opportunity, thrown away by Republicans.
@alanstorm: How many Nobel prizes in economics do you have on your shelf?
Yeah, that’s what I thought.
@alanstorm: @alanstorm: Obama didn’t exactly start from the same base as W, did he? You do remember that huge economic crisis in the waning days of the W administration? It was in all the papers.
Do you have anything to back up your disdain for Dr K, or just assertion, tribal identification, and blather from the CEC?
Krugman deals with math, and to conservatives, math is a liberal fiction they don’t understand, like evolution and global warming.
Otherwise they’d understand that the 2 things conservatives are good at is getting more americans killed and running up enormous deficits.
@alanstorm: Dude – let’s put economic recessions and lost jobs into perspective. Aug 81 to Feb 83 we lost 2.7Mil or 2.9% of Aug 81 jobs. In Jul 90 – Mar 90 we lost 1.5Mil jobs or 1.3%. In Jan 2001 – Jan 2003 we lost 2.1Mil jobs or 1.6% – from Feb 2008 – Feb 2010 we lost 8.7Mil jobs! or 6.3% of Feb 08 jobs! many lost forever. The massive hit to the economy here and globally was just that, Massive! to be where we are today is not something to shake a stick at – bailouts, stimulus (tax cuts mainly, as we did very little build stuff stimulus) and healthcare reform played a part in where we are today in spite of cutbacks, pure obstruction, hostage taking, shutting down government and shirking legislative duty all since 2011, all because of hatred towards what essentially is a moderate democrat president (yes, the ACA is a moderate thing, just ask Mitt) ….I don’t know whether to hold my head sometimes high or low….crazy – Still love my country though
@alanstorm:
Now if only Obama hadn’t started with the greatest economic crisis since the Great Depression-a crisis that in many ways was a second Great Depression-your observation might be worth something. I note that you , like Doug, want to pretend that the 2008 financial crisis either never happened, or had no effect on the economy. Believe me , I understand the reason for your amnesia , as does Krugman. Conservatives hate to be reminded that their economic policies led to disaster- for the second time since 1929. Even worse, their remedy-austerity- made everything worse wherever it was tried- see Europe , Kansas, Louisiana and Wisconsin. But hey, thanks for playing.
Best news of the day…Sully is back…at New York Magazine.
The month before GWB left office, how many jobs did we lose?
Anybody?
You mean like Brownback in Kansas? Or Jindal in LA? How’s that herd of Univorns in your back yard?
@steve s:
700,000, I believe.
And the GDP contracted 9% in Q4 of ’08.
@C. Clavin: GOP tax plans DO promote growth, you Liebral dummy. The deficit grows like crazy!
🙂
@steve s:
At the time of Obama’s inauguration we were shedding jobs at a rate of over 700,000 per month.
Obama’s preferred direction of Keynesian stimulus plus the Fed’s QE put us on the path of the recovery, steady such as it is, that we are on today. Perfect? Hardly. Better than the Republican preferred diet of tax cuts, austerity and spending reductions? Ask Sam Brownback, Bobby Jindal, and check in on many of the nations of Europe and Japan.
Many conservatives, like our OTB friend, @alanstorm: have a hard time squaring the empirical facts of our economy from 2008 to 2016 with their ideological preferences.
Doug, as a self professed libertarian (ahem…conservative) your opinion on ways the economy should improve have no. We now have 40 years or so of quantifiable data, which dates back to President Ford, that would suggest that conservative policies are bad for the economy and progressive policies have a positive impact on the economy. Your thoughts on this matter isn’t worth the toilet paper I wipe my butt with! Just stick to reporting the numbers please!
What with all the great employment opportunities I wonder why these guys:
http://hotair.com/archives/2016/04/01/a-most-violent-year-chicago-is-on-track-to-having-500-homicides/
Aren’t flocking to the employment line.
I don’t suppose any of you economic geniuses (snicker) stopped to ponder the fact that hourly wages have started to increase, modest as it is, but that hours worked per week has fallen to a two year low. That means weekly take home pay is nowhere.
Consider that health care, education and rent expense, and for those of you who eat, food, is going through the roof and it’s no wonder people are pissed off out there. They sure could use that $2500 reduction in their health care insurance premium (snicker).
A lot of the job opportunities that I am seeing are in fields such as entertainment industry: popcorn machine technician at the theater, car wax sales and demos at wholesale club, school bus driver, tricycle assemblers at the discount stores, and henna tattoo artists. I am not seeing many of those construction, high tech, or engineering jobs around here.
Would you care to flesh that one out? What, exactly, are these pro-growth strategies…
@Guarneri:
Hey, you won’t get any argument from me that the GOP-inflicted wound is still oozing pus.
Hard to see why you want to blame the doctor, though…
@Guarneri: Oh, look! A squirrel!
A@C. Clavin: “You mean like Brownback in Kansas? Or Jindal in LA? How’s that herd of Univorns in your back yard?”
Seconding this. After how many years of abysmal failures, you are still pretending that right-wing economics has any other goal than enriching the rich while impoverishing everybody else.
@Tyrell: And? You may want to take a look at what companies have been doing (i.e., moving all the good jobs abroad) before whining about this being Teh Gummints Fault.
@Guarneri:
The funny thing is that someone who supposedly understands finance wouldn’t know this.
http://nymag.com/daily/intelligencer/2015/09/obamacare-haters-freaking-out-over-new-report.html
Writers at The National Review insisted that Obamacare would drive Health Care inflation through the roof.
Ponnuru, at National Review, 2010:
Ponnuru, at National Review, four days ago:
Heads we win, tails Obama doesn’t.
(h/t Chait)
Being a republican is simple. Once you forget and/or misunderstand everything there is to know about civics, science, economics, history, and math, you’re Gold.
Did you notice that “because of concern about the costs that will be imposed by Obamacare” part?
Obamacare is responsible for bad things that happened *before it was even implemented*, and not responsible for any good thing that happened *since it was implemented*.
I’m sure you can be a republican without being dangerously brain-damaged, but it must be hard.
Romney in 2012:
“I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to 6%, and perhaps a little lower,”
@steve s: It’s possible, but there’s no particular advantage to being Republican without being dangerously brain damaged.
Dear Mr. Mataconis, J.D. George Mason University: Your comment please. http://www.esquire.com/news-politics/news/a43545/antonin-scalia-george-mason-law-school/
@Scott O:
The interesting this about this statement is that it shows that if Obama was a Republican (and white), he would be universally acclaimed as a national hero for leading the USA to a successful recovery after a financial disaster, with folks like Doug leading the acclamation. Fun fact: the unemployment rate is lower than at any time during the Reagan years.