Light at the End of the Tunnel for Jobs?
04/02/2010 4:45 pm EST
The one disappointment in Friday’s jobs number was actually good news. In March, the US economy added 162,000 jobs, according to the Department of Labor.
The number would have been even higher, except that the government hired only 48,000 temporary census workers. That was less than economists had expected and explains most of the difference between the 162,000 actual jobs added and the consensus among economists surveyed by Bloomberg of 184,000 jobs.
The shortfall in census hiring is actually good news. It means that the March increase in jobs isn’t merely a reflection of government hiring. Government hiring for census work is only a temporary boost to the employment numbers. The big bulge in census hiring will be over by June, and the government will start shedding jobs at that point.
Which is why it was so heartening to see private companies actually accounting for the vast majority of the new hires. Private payrolls increased by 123,000 in March. That’s the biggest increase since May 2007.
Digging a little deeper, the data show continued strength in manufacturing as the sector added jobs for the third straight month, and indicated the beginning of a turnaround in construction hiring. That sector added 15,000 jobs in March—the first increase in construction jobs since June 2007.
Of course, the economy isn’t out of the woods yet. As I mentioned, the federal government will start letting census workers go in June, and state governments are still cutting jobs. Despite the job additions in March, official unemployment remained stuck at 9.7% as an improving economy drew some discouraged workers back into the job hunt.
The full unemployment number, which includes discouraged workers and workers with part-time jobs who would like full-time work, actually climbed to 16.9% in March from 16.8% in February. The number of people who have been out of work for 27 weeks or longer climbed to a record 44.1% of all the unemployed.
Overall, I think these data keep the US economic recovery on track. We’re still in the early stages of a recovery. (For what to invest in during this part of the economic cycle, see this post.)
The big question for the second half of 2010, however, remains: Exactly how strong will this recovery be? Are we looking at 2% growth in the second half, or 3.5%? It makes a huge difference to corporate earnings and stock prices—not to mention the lives of real people hoping that the end of near-ten-percent unemployment is close at hand.
Full disclosure: I don’t own shares of any company mentioned in this post.