Friday, April 2, 2010

Jobs Report "Economists React: ‘Good Friday’ for Labor Market"

From Real Time Economics:

Economists and others weigh in on the strong jump in jobs and sideways move in the unemployment rate.

  • The most salient insight to be gleaned from these data is the net gain excluding weather and census effects, and that is positive. Despite the distortions in these data, the labor market definitely improved in March, and the trend in the payroll statistics is decidedly positive. The March nonfarm payroll data was slightly weaker than expected and the revision to the prior two months, January and February, was positive. –Ray Stone, Stone & McCarthy
  • Today’s employment report is, in our opinion, quite good, although not without its drawbacks. Income growth continues to be lackluster, complicating the spending picture in the immediate future. However, should job growth prove sustainable, incomes will catch up to spending patterns, thus validating the improvement we’ve seen in the first quarter. Simultaneously, it is quite worrisome to see the ranks of the long-term unemployed swell further. There is concern surrounding the skillset of these individuals and the longer they are out of the workforce, the further their skills erode. However, this action shouldn’t be entirely surprising given the fallout in the construction, manufacturing, housing and financial sectors. Indeed, nearly 52% of people are classified as “not on temporary layoff.” That is to say, more than half the unemployed are not getting their jobs back. –Dan Greenhaus, Miller Tabak
  • Many of the jobs created were temporary: temporary workers represented 40,000 jobs, and federal government temporary workers for the Census increased by 48,000. Although the government Census jobs are the result of a unique situation, private sector temporary workers are some of the first hires as an economy begins to see improvement in its employment. –Jason Schenker, Prestige Economics
  • The lower-than-expected headline gain in March was due to far fewer census workers being hired (48,000). So far this year, just 72,000 census workers have been added to the government’s payroll (versus 139,000 over the comparable period in 2000). Census hiring typically accelerates sharply in the spring (workers must be hired to go door-to-door, following up with those households that did not return their questionnaires). In total, more than 800,000 temporary census workers could be hired by mid-year (note: most will be off the government’s payroll by October). Just because the hiring didn’t show up in March doesn’t mean it isn’t coming. –Michelle Girard, RBS
  • Good Friday is apparently a good release date for the U.S. employment report. The last time, the BLS published the employment report on a Good Friday was in April 2007. Back then, nonfarm payrolls rose another strong 239,000 and the unemployment rate fell to a cyclical low of 4.4%. While the overall economic situation couldn’t be more different this time, today’s employment report is the strongest in more than two years. –Harm Bandholz, Unicredit
  • A significant turning point for the labor market. The headline came in a little short of consensus, but there were less Census workers and more private jobs than expected. Hefty upward revisions and solid hours and income details. A weather-related bounce is probably flattering March’s strength but the trend is still unquestionably one of progress. –Jay Feldman, Credit Suisse