The jobs data released this morning is a clear disappointment: only 120,000 jobs were added, which is less than what analysts predicted and barely enough to keep up with population growth. The unemployment rate went down slightly, to 8.2 percent, but only because the labor force shrank as people stopped looking for work.
In January and February, the economy added 243,000 and 227,000 jobs respectively. A strong recovery would feature something like 250,000 to 300,000 jobs added per month, at least, and it looked as if perhaps we were flirting with that sort of momentum. Apparently not.
One shouldn’t put too much stock in one month’s numbers, but that applies to the recent positive signs too. The bottom line is that the recovery is going forward sluggishly, if at all, and it needs a push. If it wasn’t already clear—and really, it was—the government needs to enact some serious stimulative measures.
But the question is: what measures, and how could they possibly be enacted? With Republicans in control of the House through at least the end of this year, any sort of stimulus package or jobs plan can be ruled out. If Democrats can take the House back and hold the Senate and presidency, perhaps prospects brighten next year—but you still have Republican obstructionism and presumed Democratic timidity. Meanwhile, minutes from the Federal Reserve’s most recent policymaking meeting show there won’t be an easing from the Fed any time soon. Through an odd combination of consensus and paralysis, Washington has settled on a jobs plan: do nothing. (Or, worse than that, should we have President Romney pushing the Ryan budget next year).
“The March jobs report should set off alarm bells,” said Robert Borosage of the Campaign for America’s Future. “Washington seems dangerously close to repeating the mistakes of 1937, moving prematurely to reduce deficits and constrict monetary policy, when the economy has not yet gained sufficient momentum to continue to grow. In 1937 that folly pushed the economy back into recession. In today’s Europe, austerity has had the same effect. We should not ignore the lessons of history and experience.”
Just to keep in mind the truly hard work ahead, take a look at the employment cliff the country is staring up at from the valley below:
Here are some more tidbits from the jobs report:
One major area of job loss was in the retail sector, which lost 38,000 jobs. Matthew Yglesias wonders if this might be part of the structural decline of retailing. Those jobs won’t be easy to add back; with online purchasing becoming more and more common, the need for big retail outlets shrinks.
The numbers are truly depressing when one looks at people who have stopped looking for work or are underemployed. The “alternative unemployment rate measure,” which is people who have been discouraged from continuing to look for work or are working part-time as they await a full-time job, is 14.5 percent. That means almost 23 million people are unemployed or underemployed.
Long-term unemployment is at record highs. Over 42 percent of the unemployed have been looking for work for 27 weeks or longer. The previous high for this statistic in the past six decades was 26 percent, reached in June 1983.
Two bits of good news: average hourly wages increased slightly, as did initial unemployment claims. Both could be signs of at least some degree of forward momentum.