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How Dismal Were March’s Job Numbers?

At first blink, today’s jobs numbers don’t look too bad. The official unemployment number dipped again, to 7.6 percent. The number of people reporting that they didn’t work even one hour last week and looked for work and are therefore “unemployed” dropped by several hundred thousand to below 12 million. The number of people working part-time, but looking for full-time work, fell by about 5 percent. Those people, included in our comprehensive monthly reckoning of the under- and unemployed, drove down “U-7” — or the estimate of the number of Americans who say they want a full-time job, but do not have one — to 16.08 percent from 16.46 percent in just one month.

And yet here’s how the mainstream media reacted.

“The slight decrease in the unemployment rate occurred not because more unemployed people got jobs, but because the number of people active in the labor force — i.e., working or looking for work — fell,” wrote Catherine Rampell in the New York Times. “The labor force participation rate has not been this low since 1979, when it was also 63.3 percent, at a time when women were less likely to be working. Baby Boomer retirements may account for part of the slide, but discouragement about job prospects in a mediocre economy still seems to be playing a large role, economists say.”

In The Wall Street Journal, Brenda Cronin wrote:

“The unemployment rate fell to its lowest level since December 2008, but mainly because about 496,000 people dropped out of the work force … Some 11.7 million workers who wanted a job couldn’t find one last month.”

James Politi of the Financial Times was no more upbeat:

“Government employment fell by 7,000, offering evidence that austerity at the federal level was setting in gradually. But the jobs in the private sector were much harder to come by than in February, with manufacturing losing 3,000 jobs, construction gaining 18,000 and retail losing 24,000.”

Alex Kowalski of Bloomberg chimed in:

“U.S. stock-index futures and bond yields fell as the report raised concern that the world’s largest economy may be weakening just as federal budget cuts take hold. The absence of sustained and bigger gains in employment and earnings underscores the Federal Reserve’s view that more progress is needed before record monetary policy stimulus can be scaled back.”

And finally this, from Washington Post blogger Neil Irwin:

“This is a terrible, horrible, no-good, very bad jobs report” began his reaction in a post entitled “Today’s jobs report is a disaster. But why?”

The answer, according to Irwin:

“Nearly four years into the economic recovery, with the unemployment rate still close to 8 percent, the nation recorded a month in which too few jobs were added to keep up with the growing American workforce (that number is more like 125,000). The headline read that the unemployment rate fell to 7.6 percent from 7.7 percent, but it was almost entirely for bad reasons. A whopping 496,000 people dropped out of the labor force, and 206,000 fewer people reported having a job, meaning that the proportion of Americans currently working actually ticked down, not up.”

What is one to make of all the bad press? All of it is intelligent, thoughtful.

But in the short term, I’d say the negativity is overblown. One of the most important pieces of monthly data — for example, the revisions of previous monthly data — revealed substantially good news: 61,000 more new jobs have been added in the past two months than previously reported. Add them to today’s 88,000, and the net number isn’t that bad.

And I’d be a hypocrite if I discounted the steep drop in our U-7 statistic, due — it would appear — to the full-time hiring of so many part-timers.

In the long term, however, the picture is pretty much as has been happening throughout the post-industrial world, and as we’ve been reporting here for years: too few jobs, even with so many Americans leaving the workforce because they’ve reached “retirement age.” More and more jobs paying less and less. Forty percent of the unemployed out of work for half-a-year or more. Black unemployment above 13 percent. And recently, government dis-stimulus.

We always warn that it’s never wise to read too much into one month’s data. But the cumulative story remains discouraging. Small wonder there are so many “discouraged workers” out there, as there now have been for years.





This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions

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