On Friday, the Department of Labor announced that the economy gained 192,000 jobs in March, bringing the U.S. back to the recent trend of modest but persistent job gains.
Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury, offered an in-depth analysis of these figures on Monday in a webinar hosted by Business Forward.
Highlights from the March Jobs Report
- U.S. employment pass its pre-recession peak, but at the current pace will not return to full employment until 2017.
- More temporary workers and longer hours could signal an increase in hiring in the near future or could reflect a new normal.
- Retail and construction employment growth continues to lag behind other sectors.
* * * * *
Businesses added 192,000 workers to their payrolls in March, and the January and February estimates were revised up by 37,000 jobs. The unemployment rate was unchanged at 6.7 percent, though this partly reflects an increase in the number of Americans looking for work. Dr. Hunt said that the data suggests that most businesses were less affected by the harsh winter weather this month as the average hours worked by employees rose to a record high.
After last month’s gain, private sector employment has now surpassed its pre-recession peak. However, total employment is still below its previous high with fewer government employees than in 2008. While this is a notable milestone. Dr. Hunt estimated that if the current pace of job growth continues at around 200,000 new jobs per month, the country will not return to full employment until 2017.
Not all sectors have recovered equally. For example, the construction industry experienced more job growth than in recent months but has only regained one-third of the jobs lost during the recession. Last month, Dr. Hunt suggested listeners watch retail trade, which experienced losses in January and February. The retail industry’s gain of 21,000 jobs in March was a positive sign but not enough to inspire confidence in the sector.
Similar to last month, professional and business services led jobs growth in March with 57,000 new employees. Of those new employees, 29,000 were temporary workers, which are always included in the professional and business services sector regardless of what industry employs them. Dr. Hunt noted that the combination of a significant increase in temporary workers and the hours worked by employees would usually indicate the recovery is about to take off, but it could also reflect a new normal. Will employers choose to rely more on temporary workers instead of hiring permanent staff?
One listener asked Dr. Hunt why the recovery has been so much slower than in previous recessions. Economists are divided on this issue, but the decline in government jobs stood out to Dr. Hunt as a key difference between this recovery and previous ones. Some economists have argued that financial crises cause longer-lasting damage than other types of recessions, which may suggest the trend of moderate job growth will continue. The weakness in Europe over the past few years may have spilled over to the U.S. market, as well, which could indicate a faster recovery in 2014 if that region begins to stabilize.
For more information, Dr. Hunt's slides are posted below: