3 Reasons Not to Panic About the March Jobs Report
Job growth slipped significantly, but not all of the numbers are cause for worry (just yet)
Underwhelming, disappointing and mediocre. Call it what you will, but the 120,000 jobs added in March is indubitably not a reason to cheer. The figure came in well below expectations, not to mention well below the average of 246,000 jobs added in each of the previous three months.
Given the rocky recovery, it may be easy to see sputtering job growth as a reason to fear the worst. Here are a few reasons to fret a little less about the slowdown.
The Unemployment Rate Is Still Falling
No, not just the drop in headline unemployment, which fell from 8.3 percent to 8.2 percent from February to March. In fact, this decline, aside from being small, is also due in part to the labor force shrinking slightly to 154.7 million, a 164,000-person drop. That's because the unemployment rate is calculated as a percentage of the total labor force, not the total population.
More meaningful, however, may be the change in the U-6 unemployment rate, which takes into account the unemployed population, plus discouraged workers, people employed part-time for economic reasons, and other marginally attached workers -- those who want a job and searched for one in the last 12 months, but are not currently in the labor force. This rate fell from 14.9 percent to 14.5 percent in March, a substantial drop. U-6 unemployment has come down considerably from its recent peak of 17.2 percent in October 2009. And another strong improvement now -- even while the headline numbers disappoint -- suggests that the labor market is still improving on a deeper level.
Sunscreen in February
In terms of raw, unadjusted jobs numbers, March normally sees a jump in job growth, as warmer weather makes for more hiring. But when the nation experiences one of its warmest winters on record, it can throw off the usual seasonal hiring pattern.
"The unusually warm winter likely shifted some hiring into the first two months of the year and wreaked havoc with the seasonal factor; therefore, the 212,000 average monthly gain recorded over the first three months of 2012 paint a more accurate picture of the labor market." says Sophia Koropeckyj, managing director at Moody's Analytics, in an analysis of the figures. "This is solid growth that will slowly absorb the unemployed and attract new workers into the labor market."
It's Just One Month
"While the report was disappointing, it is also a reminder that the data are extremely volatile," says Joel Naroff, president and chief economist at Naroff Economic Advisors, in a commentary on the figures. "Thus, we shouldn't obsess over any one monthly change, whether it is good or bad."
A longer trend of disappointing hiring would be much more worrisome, and that doesn't currently look likely. Various other indicators do not suggest a slipping recovery: jobless claims continue to decline and Americans have been spending more, which has certainly greased the wheels of the economy. Koropeckyj also points to solid consumer confidence, as well as a decline in planned layoffs.
"Weaker than expected March gains should not cause alarm since a number of other measures provide corroborating evidence of a slowly improving labor market," she says.
- The Most Lopsided Economic Recovery On Record
- The Far-Reaching Effects of the Generational Wealth Gap
- Maybe the Young Aren't Taking Over the 1 Percent
- Slipping Chinese Growth Could Hurt U.S. Exports
- Mortgage Lending Lags Pick-Up in Consumer Credit
- Where We Dwell Is Changing Fast
- How 'Shadow Inventory' Hurts the Housing Market
- 3 Reasons Not to Panic About the March Jobs Report
- How Long Will the Pain at the Pump Last?
- Is Your Bank To Blame for Pain at the Pump?
- Car Sales Soar Even as Gas Prices Do, Too
- We're Turning America into a Giant Casino
- Labor Market Showdown: The Employed vs the Unemployed
- We Are All West Now
- The Second Oil Revolution
- Invoking Fake Job Creators to Cut Taxes on the Rich
- CEOs Bullish on Economy but Will Wait and See on Jobs
- No Magic Bullet for the Price of Gas
- Bye-bye American Economic Pie
- America's Day of Reckoning is Here
- What's Good for the CEO May Be Bad for Business
- Could the Rosy Jobs Numbers Be a False Spring?
- Three Ways to Revive Our Sluggish Economy
- Consumers Still Buried In Credit Card Debt
- Job-Killing Tax Breaks
- Pumping Gas Prices for All They're Worth
- Extra Dollars You're Paying At Pump Going To Wall Street Speculators
- Why Americans Are Paying More At the Pump
- Lack of 'Rainy Day Funds' Bringing Consumers Down
- 2012 Job Gains: This Time, It's Different
- The Manufacturing Myth
- Deja View: Consumer Confidence Back Where it Was a Year Ago
- Starving Public Universities Shrinks the Middle Class
- A Farewell to Fossil Fuels
- United States Can't Control the World Oil Market
- Tensions in Middle East Fan Fears of Sharp Gas Price Hikes
- Inflation Outpacing Compensation for U.S. Workers
- The Myth of Economic Inequality
- Occupy Wall Street Must Learn That We Are What We Buy
- Six Unusual Economic Indicators
- Housing Market Improves, but Growth Years Away
- Could Strong Chinese Currency Boost U.S. Economy?
- The Downward Mobility of the American Middle Class
- Unemployment: Fudging the Numbers
- Why the Fed is Lukewarm on the Economic Recovery
- Are Student Loans the Next Debt Bomb?
3 Reasons Not to Panic About the March Jobs Report | Politics
Copyright © 2012 Tribune Media Services