March Jobs Report Shows Slow Recovery
The 120,000 jobs added in March, as compared to the 205,000 economists had predicted, are being taken as a sign that economic recovery may be slower than initially anticipated. The unemployment also rate dipped only slightly to 8.2 percent from last month's 8.3 percent.
According to the report released by the Bureau of Labor Statistics, the long-term unemployed remained unchanged at 5.3 million in March, though the number has failed by 1.4 million since April 2010. The long-term unemployed were 42.5 percent of the unemployment rate.
Those not included in the unemployment rate were the 2.4 million marginally attached workers-- those who are able and willing to work but had not looked for a job in the past four weeks. Among the marginally attached were 865,000 discouraged workers who are not currently looking for work because they believe it isn't available to them. The amount of marginally attached and discouraged workers is about the same as it was last year.
- “Overall, the report had an undeniably weak tone and will raise doubts about the strength of the labor market,” Michael Gapen, an economist at Barclay’s Capital Research, wrote in a note to clients. “In terms of policy, we do not believe this number alone is sufficient to propel the Fed into action at the April FOMC meeting (April 24-25). That said, the soft employment numbers certainly leave the door open for further accommodation and may shift the decision point to the June FOMC as the Fed continues to monitor the incoming data.”
- On the bright side, the economy has added 858,000 jobs over the last four months, the best showing in two years.
- Still, the lower-than-expected jobs report could undermine President Obama’s campaign narrative of a strengthening economy. Some 12.7 million Americans remain unemployed.
However, one encouraging sign was the drop in filings for jobless benefits.
According to The New York Times, the filings "fell to 357,000 in the week that ended March 31. The four-week average, considered a better indication of the trend, was the lowest since April, 2008."
- Steven Blitz, chief economist of ITG investment Research wrote in a research report this week that -- when forecasting what the unemployment should look like two years into recovery-- even 200,000 jobs is less than it should be.
- The Fed “is reaching the point where it will need to decide just how ‘full’ full employment really is,” wrote Steven Blitz, chief economist of ITG Investment Research, in a research report this week, said The New York Times.
- If the jobs numbers keep coming in at the levels seen in the last few months, he said, the Fed might have to consider raising interest rates.
- “It is recognizing that the economy has downshifted to a different level of growth in terms of full employment, and normalizing policy sooner than they would have thought was necessary.”
A driving factor for the 2012 presidential election, President Obama warned that there would be "ups and downs" toward achieving full economic recovery:
- “It’s clear to every American that there will still be ups and downs along the way and that we’ve got a lot more work to do,” he said at a White House forum about economic opportunities for women.
- “No issue is more important than restoring economic security for all our families in the wake of the greatest economic crisis since the Great Depression," President Obama said.
But Mitt Romney has taken the weak report as an opportunity to chide his opponent's economic policies:
- “This is a weak and very troubling jobs report that shows the employment market remains stagnant...Millions of Americans are paying a high price for President Obama’s economic policies, and more and more people are growing so discouraged that they are dropping out of the labor force altogether,” Romney said.