Real Job Growth at Last: Nation Adds 162,000 to Payrolls in March
Although the employment number fell below the Bloomberg survey consensus estimate of 200,000 new jobs, the shortfall was largely the result of a lower-than-expected number of new Census hires. While the number of nonfarm jobs added during March was skewed upward by the 48,000 jobs added by the U.S. Census, economists had expected the Census Bureau to hire anywhere from 75,000 to 150,000 new employees.
"U.S. Census jobs are very temporary, mostly part-time, and there are a lot of them. They obviously don't count for as much as a real, private-sector job, so you have to look at them separately," says David Wyss, chief economist at Standard & Poor's. "On the other hand, I suspect people who are taking those jobs are probably getting paid 20 hours per week for a couple months."
Wyss had expected the Bureau of Labor Statistics to report 150,000 new jobs in March, but had predicted private employment would be flat. In reality, excluding census jobs, the economy added 114,000 jobs.
Despite Improvement, Some Economists and Many Workers Still Pessimistic
The unemployment rate in March held steady at 9.7%, unchanged from February. The figure was right in line with the consensus estimate, according to a survey of economists by Bloomberg News.
Discouragingly, the number of long-term unemployed workers -- defined as those who have been without work for 27 weeks or longer -- increased by 414,000 during March to a total of 6.5 million. All told, 44.1% of unemployed workers have been jobless for 27 weeks or more.
Some economists were more pessimistic about the report than others. Capitol Economics, for example, a macroeconomic research consultancy, didn't think the report was cause for celebration.
"Even allowing for a rebound in March ... it looks like recovery has finally reached the point where it is actually boosting employment. Nevertheless, as the recovery started around the middle of last year, it is still disappointing that it took roughly nine months before we started to see any meaningful rebound in the labor market," said the firm's daily research note.
Separately, a Gallup Daily survey found that the underemployment rate -- a poll that tracks people who are either unemployed or working part-time but want full-time jobs -- edged up to 20.3% in March, up from 19.8% in February. Nor are the underemployed feeling particularly hopeful about their chances of finding full-time work soon -- 6 out of 10 underemployed workers did not think they would be able to find work or move to full-time work during the next four weeks, according to the survey.
"You Can't Start a House When There's a Foot of Water on the Ground."
One major reason for the continuing job losses in recent months, according to Wyss, is that it was a rotten winter for construction.
"A lot of the drop over the last couple months has been due to construction, which is almost entirely weather affected," Wyss says. "You can't start a house when there's a foot of snow on the ground. Now we're saying you can't start a house when there's a foot of water on the ground."
Construction spending in February tumbled a disappointing 1.3% to a seasonally adjusted rate of $846.2 billion, down from $857.8 billion in January, according to a U.S. Commerce Department report issued earlier this week.
But other economic reports released this week point to grim employment growth. ADP, a payroll services firm, said the private sector shed 23,000 jobs in March. Economists expected the private sector to actually add 40,000 jobs during the month.
The numbers were particularly discouraging given that many economists look to the ADP report as a preview of the monthly government jobs report. "The ADP numbers were disappointing," says Wyss. "There isn't a perfect correlation [between the two reports], but it's the best we've got."
As the Bureau of Labor Statistics was preparing to release the report, President Barack Obama was on his way to North Carolina, where he is scheduled to talk about job creation while visiting a local company that is expanding operations with the assistance of stimulus money.
The President recently signed a $17.6 billion jobs bill which provides tax cuts and credits to employers in an effort to stem job losses. Among other things, the law grants employers an exemption from the 6.2% Social Security payroll contribution for each worker hired through the end of the year, as long as the new employee had been out of work for at least 60 days. Employers can also take an added $1,000 tax credit for new employees who remain on the payroll for a full year.