March’s Goldilocks Jobs Report Highlights Lukewarm Labor Market

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Both the civilian labor force and total employment increased in March.

Another month has returned steady, but not great, job growth; after several months of slow job creation in December and January — when exceedingly cold temperatures kept consumers at home, blanketed construction projects with snow and ice, and caused supply-line disruptions for manufacturers — employers began hiring in February at a stronger pace, a pace that March nearly equaled. The 192,000 jobs added by employers to payrolls last month was a sign that the U.S. economy had withstood the difficult winter.

But that gain, while almost exactly in line with the 200,000 jobs expected by Wall Street, was hardly the early spring jump that many economists expected. Job gains were well below the 237,000 and 274,000 jobs added in October and November, respectively, before the cold weather began. However, the employment gains did catapult the labor market to an important milestone: The private sector has recovered all jobs lost in 2008 financial crisis. Although, there are now 85,000 fewer government jobs than there were twelve months ago.

“This employment report should help put to rest fears that the economy was stalling as we entered the new year,” tweeted Justin Wolfers, an economics professor at the University of Michigan. “We’re still growing, baby.” Yet, he also noted that “equally, employment growth continues on [its] post-recession trend, but steadfastly refuses to take off to provide the sort of growth we need.” Mitigating the labor market success that is the erasure of the recession-era jobs hole is the fact that the U.S. adult population has grown by 14 million since the recession began, meaning the U.S. job market is not even close to fully recovered on a per-capita basis.

Beyond achieving that important benchmark of labor market health, the jobs report can be characterized in Goldilocks-like terms; it was neither too hot or too cold. But that is not to say that the labor market is “just right.” Rather, that characterization is meant to suggest that at first glance numbers are strong. The 192,000 jobs added to payrolls in March, the average of 183,000 created per month over the past twelve months, and the total 2 million jobs added over the past year is strong. And, at that pace, the labor market is not so weak that the Federal Reserve will suspend the tapering of its monetary stimulus program that began last December. Yet, the job growth  was not where near strong enough for the central bank to increase the speed at which its monthly bond purchases are decreasing or lift the federal funds rate from near zero, where it has remained since late 2008. As Fed Chair Janet Yellen indicated in both a press release following the policy maker’s Federal Open Market Committee meeting last month and at a March 31 conference in Chicago, the labor market has much recover left to accomplish.

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