Posted Friday, March 9, 2012, at 8:48 AM
The Frances Perkins Building.
Today's new jobs news is not as good as I'd hoped, but the addition of 227,000 new jobs is still a sign of an economy that's on track for growth. An interesting tidbit is that there was very good news in the revisions which added 20,000 December jobs and 37,000 January jobs. I note that this means that the total level of employment is basically where it would have been had we done no revisions but my 285,000 jobs forecast for February had come true.
The unemployment rate stays flat at 8.3 percent. Expect this to become a fuzzy indicator. The measured labor force shrunk a lot during the recession. Some of those workers will come back as the jobs picture looks brighter and some will be lost forever to the informal sector, disabilty insurance, early retirement, and so forth. But we don't know how many will come back or what kind of growth would constitute a jobs picture that looks brighter. The important indicator to focus on is how quickly is the economy adding jobs. Right now, it's adding jobs quickly enough to feel like growth and to have a positive political impact on the incumbent. But it's not nearly fast enough to return the economy to full employment at a rapid pace. For that we'd need a nice string of months in the 300,000-400,000 jobs range. To get there we're either going to need some unexpected good news on the supply side (giant new oil discovery in Texas or something) or else the Fed needs to iron out the ambiguity in its communications strategy and put Americans' money to work.
In terms of sector breakdowns, the private sector was at 233,000 and the public sector shrunk us down by 6,000 jobs. This time around "austerity" policies were not the main culprit (though of course it plays a role) and instead we lost a bunch of postal workers. Temps were up 45,200 which is a leading indicator of permanent hiring. Durable Goods manufacturing added 31,000 led by Fabricated Metal Products and a continued autos recovery. Construction of Buildings had small positive numbers, but Nonresidential Specialty Trade Contractors got killed which I think is a slowdown in oil drilling apparatus. General Merchandise Stores stores got killed with 35,400 job losses while Food Services and Drinking Places added a stellar 40,800 jobs. That's the future of the retail environment if you ask me. Fewer stores, more eating and boozing. Health care (as ever) adds lots of jobs.