Warm reception for the improvement in the March jobs report, and Dow Indutrials surge to a 2011 high. Good to see 216,000 jobs added, unemployment rate down a tick, but the report wasn’t without its flaws.
Labor force participation remains stuck at a low 64.2%, until recently a level last seen in 1982. Average hourly earnings for private employers actually fell 2c to $19.30 (though weekly pay ticked up). The number of long-term unemployed (out of work more than six months) rose, and now accounts for 45.5% of 13.5M out of work.
The stagnant wages may be the biggest drawback to this report. As Paul Ashworth at Capital Economics notes, job growth still isn’t strong enough to bring the unemployment rate down quickly, and if it only drops 0.1% per month, as it did in March, “it would take another three and a half years to get back down to the pre-recession level.” The still-high rate continues to tamp down wage inflation, with overall average hourly earnings flat for second-straight month, and annual growth rate remained at 1.7%, Ashworth points out. “In real terms, wages are falling.”
There was also a drop in the U-6 measure of underemployment, looks as if there’s fewer “discouraged” workers out there. However, based on the participation rate, it doesn’t look as if they all went from discouraged to back in the labor force, so it makes you wonder how many are just slipping off the radar screen altogether.
April 1, 2011
Unemployment is improving, hey America, pat yourself on the back. Hey Helicopter Ben, no need for another fly by. Come on folks, who are we kidding here ? We have an equity market that was propped up by the largest measure of liquidity in the history of the human race. Stablize equities, everyone gets all kiddy again. Let’s go over the facts. We haven’t repaired our financial system. We have zombie banks out there, there has been no legislative effort to stop the TBTF zombie banks from having bad behavior and taking main stream down again. Let’s talk about globalization, because today’s unemployment/underemployment report doesn’t talk about the millions and I mean millions of Americans who do not have any skill sets to function in this new globalized economy. We’ve spent 30 years globalizing, we have spent zero years changing our education system so Americans can have meaningful work. Working for Walmart is not going to advance our society so the next generation can have it better than the last one. We have the entitlement bogey man just a few years away with Obamacare and the baby boomers stepping up to the plate for their share of the ponzi scheme we call social security. Is anyone listening out there ?