| Drought Over? |
5 April 2004
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US Adds 308,000 Jobs in March
The jobless recovery added 308,000 jobs to the American economy in March, and the question now is whether this is a false start or the beginning of flood of jobs. There is no way to tell at the moment, but the flat manufacturing sector and an actual increase in the unemployment rate to 5.7% from 5.6% undermines the good feelings the White House will try to sell the country.
Why the discrepancy between the job figure and the unemployment rate? Quite simply, they are based on two different surveys. The survey for the unemployment rate targets households, and this captures those who have returned to the workforce but who have not yet secured work. According to this measure, March had 8.35 million unemployed Americans while February had 8.17 million. The average duration of joblessness persists at a 20 year high in excess of 20 weeks. In addition, those who accepted part-time work (the underemployed) rose to 4.7 million in March from 4.4 million in February.
Since that part of the picture is less attractive, one can expect Mr. Bush's supporters to tout the 308,000 new jobs and the upward revisions for the number of jobs created in February to 46,000. In addition, Wall Street analysts were expecting the March figure to be much lower, more like 123,000, with the unemployment rate expected to remain at 5.6%. Whenever the actual number of jobs created exceeds the number the experts expect, stocks will soar, and the press will report that things are looking brighter.
There is no way to make 308,000 new jobs sound like bad news, and although another 7 months of similar job growth from now until the election would just about balance out the number of jobs lost on Mr. Bush's watch, no one should diminish the importance of this result. If this marks the beginning of a trend, there is a chance to recapture some of the vibrancy and self-confidence that the American economy felt in the 1990s. That would benefit just about everyone, including Mr. Bush, the poor, and non-Americans.
No one, though, expects 300,000 jobs per month. What will have to happen is consistent six-figure growth, a decline in the unemployment rate to 5.0% or lower, and no stopping or backsliding. And if Wall Street keeps getting surprises like last Friday's numbers, so much the better.
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