Thoughts on the March 2010 Jobs Report
This morning, the Bureau of Labor Statistics released employment information for the month of March 2010. The headline numbers showed 162,000 nonfarm payroll jobs were created during the month—the first solid month of job growth in more than two years, while the unemployment rate remained stable at 9.7%. The Obama administration was ebullient about the job gains, but ignored disturbingly negative information buried in the report.
Most troubling is what appears to be a new trend in the broader U-6 measure of unemployment, which includes discouraged workers and part-time workers who were unable to find full-time jobs. This measure of unemployment rose to 16.9%, up from 16.8% in February and 16.5% in January, and translates into more than 26 million unemployed workers.
Also troubling is a shift in the distribution of the unemployed by duration of unemployment. The chronic unemployed—those out of work for more than 6 months—rose during March by 414,000 to 6.547 million, while the median duration of unemployment rose to 20.0 weeks from 19.4 weeks in February. Workers out of work for so long see their skills atrophy and find it increasingly difficult to compete against other workers for jobs.
Even within the standard U-3 definition of unemployment, which excludes discouraged workers and part-time workers who would prefer to work full-time, unemployment rose by 134,000. The unemployment rate actually rose by 0.06% from 9.687% to 9.749%. The BLS rounds to the nearest tenth of a percent, so both of these numbers "round" to 9.7%. Had the number of unemployed risen by as little as 2,000 additional workers, the official unemployment rate would have "ticked up" to 9.8%. So much for "unchanged."
And within the 162,000 new nonfarm payroll jobs are 48,000 temporary Census workers and another 40,000 private-sector temporary workers. During the past six months, temp employment has grown by more than 300,000. The U-6 numbers suggest that most of these workers would prefer, but are unable to find, full-time jobs.
So, before we take a victory lap, let's wait for some additional data points. Things could get worse before they get better.
