The latest jobs report was a solid one, as I mentioned in an earlier post. Job growth is picking up speed, reaching 216,000 in March. Rising oil prices don’t seem to be spooking companies, at least not by the week of March 12, when the Labor Department conducted its survey. All that is very good news. Unlike last year’s recovery — which petered out in the spring — this year’s remains alive.
But today’s report was not great, either. Wages did not grow at all in March and have trailed inflation over the last year. The workweek didn’t get any longer; it typically does get longer before a big boom in hiring. And an employment increase of 216,000 is not exactly blistering. At that pace, the unemployment rate would not return to 5 percent for about five more years.
The economy is making progress, but the progress is slow and uncertain.
Last night, I posed five questions to ask about today’s report. I offer some answers below.
1. Has the latest turmoil — oil prices, Europe’s debt troubles, state and local cutbacks — spooked employers?
Again, no. Job growth over the last three months has averaged 159,000, the highest such number (excluding temporary Census jobs) since the recession began, in late 2007.
2. Is there reason to believe the Labor Department might be undercounting job growth?
Yes. The numbers above refer to the government’s estimate of job growth based on its survey of employers. But the government also surveys households each month. At turning points, the household survey can be more accurate, because the employer survey often fails to capture the creation of new companies.
According to the household survey, the economy added 291,000 jobs last month and an average of 219,000 over the last three months.
3. What’s happening to wages?
Absolutely nothing. The average hourly wage of all employees remained $22.87, unchanged from February and up only 1.7 percent over the last year. The wage trends are a reason to be sober about future consumer spending and highly skeptical of claims that the economy is on the verge of an inflationary spiral.
4. Are existing employees working more hours?
Not in March, which is not a wonderful sign. But the Labor Department did revise its estimate of the February workweek upward, to 34.3 hours, from 33.2 hours.
The workweek was also 34.2 hours back in May 2010 and hasn’t fluctuated much since then. By contrast, between June 2009 and May 2010, before last year’s recovery stalled out, the news was much better, the workweek rose significantly — to 34.2 hours, from a low of 33.7 hours.
5. How are the underemployed and the hard-core unemployed faring?
The number of people working part-time because they couldn’t find full-time work had been falling in recent months, as had the number of people who have been unemployed for at least 27 weeks. But there was no progress in March. The number of involuntarily part-time workers actually rose a bit, to 8.4 million from 8.3 million. The number of long-term unemployed did too, to 6.1 million from 6 million.
One last point: The Labor Department’s usual revisions to earlier data — January and February, in this case — was mildly positive. Job growth in each month was slightly higher than thought.
Article source: http://feeds.nytimes.com/click.phdo?i=26862ed7044157b732de8a52c190fba0