March jobs report report disappoints

(MoneyWatch) The March jobs report was a disappointment: Only 120,000 new jobs were created, versus expectations of over 200,000 and the unemployment rate dropped to 8.2 percent from 8.3 percent in February, leaving 12.7 Americans still out of work. Given the three previous' months results, where job creation averaged 246,000 per month, this report is a setback to the nation's labor market.

Even though the economy has added 858,000 new jobs since December, whenever I think about the jobs situation, I always think of one word: BUT. Yes, there has been a marked improvement in the jobs market and the unemployment rate of 8.2 percent is the lowest since January 2009 - BUT we still have a long way to go.

US economy adds 120K jobs, jobless rate at 8.2 pct
Bernanke: Economy lacks strength to sustain gains

After the last employment report, someone said to me, "Can't you just be happy with progress?" Hey, I love progress, but I also receive tons of e-mails from struggling people who are still out of work or desperately trying to rebuild their financial lives after finally landing a job. So forgive me if I present the good news, with an asterisk.

CBS

The unemployment rate is down from over 10 percent only a couple years ago, BUT it has remained above 8 percent for three years, the longest stretch since monthly records began in 1948. Just before the beginning of the recession, the rate was 5 percent. The reality is that the rate might not budge for a while, because as conditions improve, more frustrated workers re-enter the labor force and restart their job searches.

The new entrants increase the "participation rate" or the percentage of the working age population in the labor force. The government only counts those in the labor force who are actively looking for a job as "unemployed," which means that the economy needs at least as many new jobs as new people entering the labor force, just to keep the unemployment level even. In March, there was a slight drop in the participation, which is why the unemployment rate dipped.

For months we worried about job losses and paltry gains, so four consecutive months of more than 200,000 new jobs is welcomed, BUT at the current rate of job creation, it will take approximately 4 years to return to the pre-recession level of unemployment of 5 percent. Additionally, since employment bottomed in February 2010, the economy has added approximately 3.6 million jobs, BUT there are still 5.2 million fewer total jobs now than when the recession started.

There are more new jobs, but it's still hard to land one job due to competition. As of March, there are 3.6 unemployed people for every job opening available, the lowest ratio in three years. Still, the ratio is usually 2 to 1 in a healthy job market. The Institute for Supply Management said this week that 20 percent of its members say the shortage of skilled labor is one of the reasons they can't fill jobs.

Sure lots of people are getting jobs, BUT at lower salary levels. According to a recent Rutgers University study, just 7 percent of those who were let go during the recession have matched their previous income. A little over half reported taking a pay cut - and of those, 29 percent took a reduction in salary by 30 percent or higher. To top off the bad news, 30 percent of the reemployed took a reduction in benefits.

People are taking the jobs that are available and in the recovery, those jobs are increasingly found in low-paying areas of the economy. According to the Wall Street Journal, nine of the 10 most popular professions in the U.S. (administrative assistants, laborers, janitors, customer-service representatives, wait staff, food-preparation workers, office clerks, cashiers and retail salespersons), that account for more than 20 percent of total jobs, make less than the average wage in the U.S. -- $45,230. Only registered nurses, earn more than the average ($69,110 a year).

-The improvement in the jobs landscape is great, BUT it can't reverse the impact that unemployment has on total earnings. Recent research ("Recessions and the Cost of Job Loss, NBER" by Steven J. Davis and Till von Wachter) quantifies how much unemployment can impact lifetime earnings. If the unemployment rate is above 8 percent, the average earnings loss equals 2.8 years of pre-displacement earnings. The unemployed worker will earn 19 percent less than an employed worker in the same field. As my colleague Mark Thoma notes, "The longer that the unemployment rate stays high, the larger the permanent losses -- losses that fall mostly on individuals who have done nothing to deserve such a fate except choose the wrong occupation, be born at the wrong time and enter the workforce during a recession."

-- Jobs created: +120,000 (Feb revised up by 13,000 to 240,000; Jan revised down by 9,000 to 275,000, totaling a net addition of 4,000 jobs)

-- Private sector jobs created: +121,000

-- Government: -1,000

-- Unemployment rate: 8.2 percent (lowest rate since January, 2009)

-- Under-Employment Rate (marginally-attached, part-time): 14.5 percent (from 14.9 percent -- in 2007, the rate was 8 percent)

-- Total number of unemployed: 12.7 million (from 12.8 million)

-- Long-term unemployed (jobless for 27 weeks and over): 5.3 million representing 42.5 percent of the total unemployed (since April 2010, the number of long-term unemployed has dropped by 1.4 million)

-- Average duration of unemployment: 39.4 weeks (from 40 weeks)

-- Average workweek: 34.5 (from 34.6)

-- Average hourly earnings: up $0.05 to $23.39 (up 2.1 percent over past 12 months)

[alphaa10000]

INDUSTRIAL-GRADE GOP BLARNEY

TalMD said, "120K jobs added Obama's success! 200K expected by (but) not achieved, Bush's fault!"
-----

Well, yes, you are correct-- it is Bush's fault. The people who promoted the candidacy of G.W. Bush also pushed for market DEregulation-- the GOP showcase for an economic miracle on Wall Street. Unfortunately for the rest of us, both Bush and DEregulation proved a disaster.

Both Bush and DEregulation began in early 2001, with high hopes among the cavalier minority Bush was delighted to dub his political base. Unfortunately, their DEregulatory dream was entirely play money, but enough to create a monster "casino" (McCain's own term) on Wall Street.

That casino recklessly endangered real money like consumer mortgages, pension funds, and investment portfolios-- as well as eroded the nation's economy, economic infrastructure and future growth prospects.

The DEregulated white-collar criminals on Wall Street flourished from 2001 to 2007, when the market began to fall apart in hopeless disarray, and there was no help in sight. Although most recklessly "over-leveraged" markets crash, this crash was different, thanks to DEregulation-- there was no audit and oversight to call market players to their fiduciary responsibilities.


AND NOW, ABOUT GEORGE BUSH

Like a youngster with a gadget he does not understand, G.W. Bush pointed at the US economy with his magic wand of tax breaks for the wealthy, drove the country dizzy with deficit spending (Bush doubled the national debt) and then expected a miracle on Wall Street. Instead, he fostered a crime wave that major banks and market fund managers still recall with nostalgia.

Yes, Wall Street became a nest of white-collar neocon-men, the same criminal class which asked for a tax-paid bailout (delivered by Bush and Paulson), and then left taxpayers with millions of foreclosures and the worst damage to the economy in 80 years (since the last GOP-sponsored lessez faire disaster).

When Bush left office, the US economy was hemorrhaging jobs, and most feared a free-fall into depression. When Obama recovery spending began, job loss slowed, then reversed in a mild recovery. (see Chart 3 at-- http://www.politicalmathblog.com/?p=1623)

After the economic disaster which GOP lessez faire economics foisted upon America, even 120,000 jobs for any month is a quantum jump above what Bush and the GOP were doing when they left the White House.

The crisis is not over, and part of that crisis is the ignorance of those who refuse to recognize the GOP formula for prosperity has crashed and burned-- for the second time in a century.

[alphaa10000]

MORE ABOUT CHART 3

Now that you have read the GOP attempt to explain away Obama economic claims, review the same economic numbers from a different context--

"When Obama recovery spending began, job loss slowed, then reversed in a mild recovery..." (see Chart 3 at-- http://www.dailykos.com/story/2011/08/28/1011405/-Three-Charts-To-Email-To-Your-Right-Wing-Brother-In-Law)

[crondanet5]

Great post Jill. I onder how many of the over 50 crowd are included in these figures or are they the ones who have given up? By eliminating the older worker from your work force you cut your health care expense. What a way to run a company.

[sandiegopete]

It is amazing we have added any jobs at all in the past year. With the middle class being gutted by the exportation of jobs to other countries where the employer does not have to worry about providing a safe workplace while at the time time saving 33 to 90% on labor costs it is hard to see where those new jobs are coming from.

When the United States decided to lower the stardard of living for most of its people by exporting the best jobs overseas we guaranteed our decline. Today China is a wealthier country than the United States and at some time in the not too distant future China will surpass the United States in military might. China is developing engineers and processes, aided by our own corporations' exportation of technology to them, while in the United States we make it as hard as we can for young people to gain modern education in the sciences. We continue to cut back funding for education while providing incentives to companies that export jobs overseas. We encourage employers in the U.S. to hire well educated workers from foreign countries and admit them through the H-2B visa program. Our educational systems have become so depleated that U.S. employers have to go out of the country to find qualified workers.

I wonder how many of the new jobs reported involve jobs filled by foreign nationals imported under the H-2B visa program, a program that is supposed to be for temporary workers but they all seem to keep working in this country indefinitely.

[diamruby]

That number may not be what we wanted but it is still 120K people off of unemployment & hopefully welfare. Too bad the media trashes everything good that happens, they must be following in the trash talker Rush Limbaugh's footsteps. It is so easy to blame the current President for all business failures despite the fact they alot of these big corporations have chosen to employ slave labor in foreign countries so they can make bigger profits & pay no taxes to the country they live in, the USA, while enjoying all the benefits of living in a free country. It is a fact that corporations have realized the largest profits since the recession started & continue to do so at the expense of their country. These corporations are also the ones hiring illegals & working them for nothing.

[ConSense]

We could have Howdy Doody for president and gain 120k jobs. Come to think of it...

[ConSense]

Prior to 2009 we also had a democrat-controlled congress for 2 years. How long are you gonna blame Bush for Obama's failures? Didn't he campaign on a promise to turn things around?

[ConSense]

"it has remained above 8 percent for three years, the longest stretch since monthly records began in 1948."

I'm sure this is all Bush's fault, but hasn't Obama been president for, oh, a little over three years?

It's apparant that "hope and change" was really "hype and strange."

[nottblu]

you forget that both houses of congress were taken over by the democrats the last two years of Bush's second term. Obama owned the economy right after he spent a trillion tax payer dollars on "stimulus" and those "shovel ready" jobs.