CNNMoney.com Improvements in the job market may finally be taking hold, as strong business hiring last month brought the unemployment rate down to its lowest level in two years. The economy gained 216,000 jobs in the month. That's better than the gain of 180,000 predicted by economists surveyed by CNNMoney, and also a significant improvement over the 194,000 jobs added in February. &quot;Almost two years after the recession officially ended, the labor market appears to finally be picking up,&quot; said Kathy Bostjancic, director of macroeconomic analysis for The Conference Board. The unemployment rate continued to edge down, dropping to 8.8%, the lowest level since March 2009. The unemployment rate has shed a full percentage point in the last four months, the largest four-month drop since 1984. &quot;The unemployment rate has broken through the sound barrier and is continuing to decline,&quot; said Sung Won Sohn, economics professor at Cal State Channel Islands. &quot;The recovery in employment is here to stay.&quot; While the payroll numbers are compiled from a survey of employers, the unemployment rate is determined by a separate survey of workers, which also showed significant improvement. The number of discouraged job seekers who want to work but have given up actively looking was down slightly, as was the number of workers who wanted full-time jobs but could only find part-time work. Another encouraging reading -- the number of people who lost their jobs during the month was down by 125,000, falling to the lowest level in two years. &quot;It's strong across the board,&quot; said Tig Gilliam, president of the North American unit of job placement firm Adecco. &quot;Is it as fast as we'd all want? Probably not, but it's moving in the right direction and it continues to accelerate.&quot; Who's hiring and who's not Private businesses added 230,000 jobs. Since businesses started hiring again a year ago, they have now added 1.8 million jobs, with nearly a third of those jobs added in just the first three months of this year. The trend in business hiring is widespread, with 68% of industries adding jobs so far this year. Among the leading sectors were business and professional services, which added 78,000 jobs, health care and social services, which brought on 44,000 workers, and leisure and hospitality, which increased staffing by 37,000. One closely watched sector, temporary workers, grew by nearly 30,000. That is important because many businesses will bring on temporary staff as a prelude to making permanent hires.
Reuters Demand for temporary workers is broadening to professional categories like technology and engineering, offering evidence that a long, slow U.S. jobs recovery may finally be getting some momentum. An uncertain economic environment continues to drive sales at temporary staffing providers, as employers look for flexibility. Since placement of contingent workers is typically a leading indicator of labor trends, strong demand suggests the wider labor market may be turning the corner. In areas such as engineering, employers now compete for candidates, which could soon allow staffing companies like Manpower Inc and Robert Half International to boost rates, lifting margins. &quot;Overall demand remains very good,&quot; said Tig Gilliam, head of Adecco's North American operations. &quot;Clients got lean, but their business has been strong enough that they need talent, and they're looking for temporary and contract workers first, then temp-to-hire, then permanent positions.“ Nonfarm U.S. payrolls jumped 216,000 last month, the biggest increase since May, and the unemployment rate fell to a two-year low of 8.8 percent. The government report showed temporary payrolls up by 28,800, a faster pace than in February. The percentage of temps in the workforce rose to 1.73 percent, highest since 2008 but still below a record high of 2.03 percent in 2000. Factors to watch in coming months include the effects of $4-a-gallon gasoline and Japan's earthquake and nuclear crisis, Gilliam said. Some Adecco clients, such as auto companies, have cut back on temps because of disruptions to their supply chain, while others have taken on more temps because they're picking up work from Japan. &quot;There's still a lot of uncertainty so temp usage continues to go up,&quot; said Roy Krause, CEO of SFN Group Inc. &quot;Permanent placement in finance, accounting, mortgage, IT even, is much much stronger than people anticipated,&quot; he said. At March's rate of job growth, payrolls will take almost three years to reach pre-recession levels. Friday's report followed other signs of improving job prospects. Announced layoffs in the first quarter were the smallest total since 1995, and private employers added 201,000 jobs in March. A survey of U.S. chief executives by the Business Roundtable found more than half are looking to add jobs over the next six months and their view of the economy brightened. 'ACCELERATING GROWTH‘ Staffing executives often accentuate the positive but evidence of strong demand also comes from outside the sector. Sterling Bancorp, whose holdings include a New York business bank that lends money to staffing companies -- and studies their books -- sees accelerating demand for temps, especially professionals. Such demand turned up dramatically last year and has stayed &quot;quite strong&quot; into 2011, said John Millman, president of Sterling. The bank's loan quantity correlates directly with the number of temps employed, and Sterling has identified temporary help as a major growth area for its financing business. &quot;We'll be up double-digits again this year, but it will exceed the growth we saw last year. It is accelerating,&quot; Millman said. &quot;Technology is really picking up. There is more and more of a trend to bring in temporary skilled people.“ For investors in staffing companies, a key question is when that trend reaches levels that enable staff providers to raise prices and hence their margins. JP Morgan analyst Andrew Steinerman, with &quot;overweight&quot; ratings on Robert Half and Manpower, says such stocks benefit from an uncertain economic environment and calls the outlook for the remainder of 2011 &quot;optimistic. &quot;Supply is beginning to tighten, and though not yet enough to push up bill rates, we see pricing power returning naturally later in the year,&quot; Steinerman said in a research note. Higher rates will appear first in the engineering field, where talent is available but skilled candidates sometimes face multiple offers, said Adecco's Gilliam. SFN's Krause said it was unclear whether staffing companies would gain pricing power, but said, &quot;You may see some wage inflation, which means better margins for our industry.&quot;
Yahoo! News The nation's unemployment rate dropped to its lowest level in two years in March, and the outlook is brightening as major companies plan to add more jobs. Increased hiring cut the unemployment rate to 8.8 percent — an encouraging sign for the unemployed and for President Barack Obama's re-election prospects. Still, the job gains haven't led many people who stopped looking for work during the recession to start again. Fewer than two-thirds of American adults are either working or looking for work — the lowest participation rate in 25 years. The economy added 216,000 jobs last month, the government said Friday. Factories, retailers, the education and health care sectors, and professional and financial services all expanded payrolls. Those gains offset layoffs by local governments, construction and telecommunications. The improved outlook propelled the Dow Jones industrial average to a 2011 high in early trading. Stocks then pared their gains as oil prices climbed to 30-month highs. The Dow closed up about 57 points, or 0.46 percent. The private sector added more than 200,000 jobs for a second straight month. It was the first time that's happened since 2006 — more than a year before the recession started. And it could mark a turning point in job creation. America's largest companies plan to step up hiring in the next six months, a March survey of CEOs found. Google, Siemens Corp. and Ford Motor Co., among others, have said they plan to add workers. Economists expect the stronger hiring to endure throughout the year, producing a net gain of about 2.5 million jobs for 2011. Even so, that would make up for only a small portion of the 7.5 million jobs wiped out during the recession. The economy must average up to 300,000 new jobs a month to significantly lower unemployment. The unemployment rate has fallen a full percentage point since November, the sharpest four-month drop since 1983. Stepped-up hiring is the main reason. But a more sobering factor is that the number of people who are either working or seeking a job remains surprisingly low for this stage of the recovery. People without jobs who aren't looking for one aren't counted as unemployed. Once they start looking again, they're classified as unemployed, and the unemployment rate can go back up. That can happen even if the economy is adding jobs. Just 64.2 percent of adults have a job or are looking for one — the lowest participation rate since 1984. The number has been shrinking for four years. It suggests many people remain discouraged about their job prospects even as hiring is picking up. A falling unemployment rate is vital for Obama, who is 19 months from a re-election vote and facing a lineup of potential Republican challengers who will make his stewardship of the economy the dominant issue. President Ronald Reagan had low job-approval ratings in his first term, when unemployment surged to 10.4 percent. By Election Day 1984, the unemployment rate had sunk to 7.2 percent. Reagan won a landslide victory. &quot;Although we got good news today, we have to keep the momentum going,&quot; Obama told workers at a UPS shipping facility in suburban Maryland. &quot;There are still millions of Americans out there that are looking for a job that pays the bills.“ Just 15 percent of Americans surveyed in mid-March said the economy had improved in the past month, according to an Associated Press-GfK poll. That's a sharp decline from January, when 30 percent said so. And 28 percent said the economy would worsen. It's the largest percentage to say so since the question was first asked in December 2009. &quot;It's good for Obama that unemployment is falling,&quot; said Terry Madonna, a political scientist at Franklin & Marshall College in Pennsylvania. &quot;But ultimately, what voters care about is whether this recovery is helping them. Can the kids go to college? Can I pay the mortgage? Can I take a vacation?“ Even those who are working have less spending power than they did a year ago. Wages were flat in March. And over the past 12 months, they've trailed inflation. Workers have scant bargaining power to demand raises because the job market is still healing only slowly. Job growth is getting no help from local governments, which cut 15,000 workers last month while wrestling with budget shortfalls. They are expected to keep shedding jobs. Also, housing remain depressed in many cities, weighed down by falling prices and rising foreclosures. Construction spending dropped in February to a 12-year low. Higher food and gas prices are also leaving consumers with less income to spend on other goods and services. Including part-time workers who would prefer full-time work, plus people who have given up looking altogether, roughly 24 million people were &quot;underemployed&quot; in March. That's 15.7 percent of the work force. But the Business Roundtable, representing CEOs of large companies, found in a survey released this week that 52 percent of its members plan to increase hiring within six months. That's the largest proportion for the group since it began polling its members nine years ago. Siemens Corp., which makes industrial equipment, is ramping up production of gas turbines because of an expected increase in demand from U.S. utilities. The company has hired 200 workers in Charlotte, N.C. The expansion will create 1,000 jobs by the end of next year, doubling head-count at the plant. Mark Pringle, director of operations at the plant, said it advertises about 50 openings at a time and receives 2,000 to 3,000 applications each time. The new jobs are in addition to about 2,800 job openings that Siemens is seeking to fill across the country. Lease-to-own retailer Aaron's Inc. says it plans to add nearly 1,000 jobs in the United States and Canada this year and open about 150 new stores. The company sells residential furniture, consumer electronics and appliances. Aaron's caters to consumers who lack the cash or credit to buy a new TV or bedroom set outright. Shoppers make monthly payments after the company checks personal references. CEO Robin Loudermilk said that during the recession the company saw formerly high-income consumers who had lost credit after layoffs or pay cuts. Now, he said, more customers are moving into homes after getting a new job or shifting from part-time to full-time work. &quot;We are definitely seeing an uptick in traffic,&quot; he said. &quot;We're starting to see the employment picture get better.“ Google is hiring at least 6,200 workers this year, a 25 percent boost that will leave the Internet search leader with more than 30,000 by the end of 2011. General Motors says it will recall the last 2,000 of its laid-off production workers by fall, clearing the way for new hires as auto sales continue to rebound. The strengthening jobs picture could lead the Federal Reserve to start boosting interest rates sooner to fend off inflation. But for now, most economists are sticking with their forecast for the first rate increase to come in about 12 months. &quot;The unemployment rate has broken through the sound barrier and continuing to decline,&quot; said Sung Won Sohn, economist at California State University. &quot;The recovery in employment is here to stay.&quot;
Washington Post Unemployment drops to 8.8 percent in March, signaling steadier economic growth The improving economy is finally starting to translate into meaningful job creation, with new data Friday showing that employers shrugged off rising fuel prices and other concerns to keep hiring in March. The unemployment rate has now fallen a full percentage point since November, and private employers created more jobs in the first three months of the year than in any similar span since 2006. The plight of American workers, nonetheless, remains difficult, with the jobless rate at 8.8 percent, down from 8.9 percent a month earlier. At the current pace of economic growth, it will take years for the rate to return to healthy levels. But the numbers released Friday by the Labor Department confirm that a series of upbeat readings on the job market in recent weeks were more than blips and reflected a significant trend. And the report, which said employers added 216,000 net jobs last month, was perhaps most encouraging for what it didn’t show. Despite higher fuel prices and turmoil in the Middle East, there was no noticeable decrease in business confidence. Employers pressed ahead with their plans to expand hiring. “ We’ve never had a growth spurt to this degree in the eight years I’ve been here,” said Mark Pringle, director of operations at a Siemens plant in Charlotte. The facility makes turbines and generators for electrical plants and has hired 200 people so far this year. “We’re finding a lot of good people out there applying for these jobs.” The jobs numbers come amid other promising signs that the recovery is building momentum. The stock market wrapped up the first quarter this week with a 6.4 percent gain in the Dow Jones industrial average and continued to tack upward Friday, adding another 0.5 percent. Investors were pleased that the job growth was continuing — but not so fast that the Federal Reserve might want to apply the brakes by raising interest rates anytime soon. Also contributing to the buoyant markets were reports from automakers Friday showing that auto sales rose in March. Sales of new vehicles were up 11 percent over a year before at General Motors, 16 percent at Ford and 23 percent at Honda. A separate report Friday also showed continued strong growth in the manufacturing sector, with the Institute for Supply Management’s index of activity at the nation’s factories edging down to 61.2 from 61.4. Numbers above 50 indicate expansion. But the stronger jobs numbers offered the clearest evidence that the economic recovery is on track. The Obama administration, while continuing to emphasize that unemployment remains too high, pointed to the report as a sign of economic progress. “ It’s not a flash in the pan,” Austan Goolsbee, the president's chief economist, said in an interview. He noted that the employment report showed that jobs were being added across a broad range of industries and that private payrolls had expanded for 13 straight months. Republican leaders, while acknowledging progress, argued that the policies they propose would accomplish even more. “ Any improvement in the jobs picture is welcome news for the country, but Washington needs to do more to end the uncertainty plaguing job creators,” House Speaker John A. Boehner (R-Ohio) said in a statement. That, he added, would mean reducing government spending, “ending the threat” of tax hikes, reducing regulation and approving new trade agreements. Independent economists viewed the report with a sense of restrained optimism and a degree of relief. In recent weeks, there have been conflicting signs from economic indicators, including weak readings on housing and capital investment by businesses. Many leading forecasters had lowered their estimates of first-quarter growth, and some feared that political turmoil overseas and higher energy prices might scare businesses away from making new hires. “ My reaction was ‘phew,’ ” said Jerry A. Webman, chief economist of Oppenheimer Funds. “That’s better than ‘ugh’ but not as good as ‘wow.’ ” The Japanese earthquake, tsunami and nuclear crisis happened too late in March to significantly affect the monthly employment report. But they could influence future numbers, particularly if shortages of Japanese-made supplies cause U.S. factories to suspend production. In the fine print of Friday’s Labor Department report, there was not much to love but plenty to like. The improvement in the unemployment rate was attributed to the 291,000 additional workers who described themselves as having a job, rather than people giving up their job search out of frustration. A broader measure of unemployment — which also captures discouraged people who have given up looking for work and those who are working part time but want a full-time job — fell to 15.7 percent from 15.9 percent. The length of the average workweek rose to 33.6 hours, from 33.5, allowing those who already were working to take home more income. (In a less promising sign, average hourly earnings dropped). The employment gains were were strongest in professional and business services, a category that includes white-collar professionals such as accountants as well as those working for temporary employment services. That sector added 78,000 positions. Other major job creators were health care, which added 45,500 jobs; leisure and hospitality, 37,000 jobs; retail, 18,000 jobs; and manufacturing, 17,000 jobs. The only sector to shed large numbers of jobs was government. Local governments cut 15,000 positions in March, reflecting ongoing budget woes.
US News and World Report March Jobs Report Brings Good News—Finally Today's jobs report offered a long-awaited reason for optimism: Finally, the employment market looks to be improving in a meaningful way. The 216,000 jobs the Labor Department reports were created in March hardly puts a dent in the massive losses of the last three years, but it beat what economists expected, about 200,000 jobs, and it's significant enough to signal an upward trend. Combined with upward revised numbers for the last two months—68,000 for February, up from the originally reported 63,000; and 194,000 for January, up from 192,000—we can now positively say the job market is on its way to recovery. &quot;It's encouraging,&quot; says Diane Swonk, chief economist of Chicago-based financial services firm Mesirow Financial. &quot;We've got a lot of uncertainty going forward, but it is sort of a ray of hope amidst what's been a very cloudy economic outlook.&quot; Yet this recovery has proven itself slow, and many job seekers aren't yet feeling the effects of newly created jobs. The unemployment rate dropped only slightly in March to 8.8 percent, down from 8.9 percent in February, and economists say that number is misleadingly low because so many unemployed have given up looking for work. The rate may even increase again before it drops. Perhaps more alarmingly, the number of long-term unemployed, people who have been jobless for 27 weeks or more, is still at 6.1 million. &quot;That's what you're really worried about,&quot; Swonk says. &quot;The longer you're out of the labor force, the harder it is to get a job.&quot; Growth in the private sector is driving the recovery; private payrolls increased by 230,000 jobs in March. Professional and business services made a strong showing, expanding by 78,000 jobs, though much of that gain is attributed to temporary help services, which shows some employers still aren't confident enough to fill full-time positions. Health care, a sector that's provided constant growth recently, added 37,000, as did leisure and hospitality. Manufacturing gained 17,000 jobs, and mining added 14,000. Hearing about this growth, some employees who are unhappy at work say they'll consider leaving their jobs to look for another position. But Peter Morici, a professor of international business at the University of Maryland and former director of economics at the U.S. International Trade Commission, warns workers not to be over-confident. &quot;Unless they have a specialty that's in high demand, they are going to have trouble finding another job,&quot; he says. &quot;This is a mediocre job market. It looks so good because things have been so bad.&quot; To put things in perspective, we need to gain about 350,000 to 400,000 jobs a month to return to our pre-recession unemployment rate, Morici says. While March's report highlighted some of the market's bright spots, local government was not one of them. The sector continued on its downward trend, losing 15,000 jobs during the month, bringing total losses since September 2008, employment's peak, to 416,000. Construction, too, is still weak. While the sector gained jobs last month, it showed no improvement in March. &quot;We lost 2 million construction jobs since the peak,&quot; Swonk says, &quot;and those jobs are just not coming back.&quot; As for what to expect moving forward, most economists are cautiously optimistic, expecting slow improvement while hoping for something better. A survey from CareerBuilder and USA Today that showed this year's first quarter boasted the strongest hiring in three years predicted similar growth during the next quarter, expecting more than 28 percent of employers to hire full-time employees. &quot;Our latest survey points to continued, measured gains over the next three months,&quot; CareerBuilder CEO Matt Ferguson wrote in a release. Yet without further acceleration of the employment market, recovery could be &quot;lumpy,&quot; says William Rodgers, professor of public policy at Rutgers University and chief economist of the school's John J. Heldrich Center for Workforce Development. &quot;The economy, in my view, has sort of shifted from first gear to second gear ... In the next quarter or few months, we're really looking for more signs that now we're going to get the economy shifting into that third or fourth gear.&quot;
New York Times Average Length of Unemployment Rises Again As we’ve noted before, the length of time the typical unemployed person has been out of work has been getting longer and longer. And in March, the duration of unemployment again rose, to an average of 39 weeks: That’s the longest on record, even when you account for the fact that the Labor Department changed its methodology for calculating average unemployment duration at the start of this year. (The numbers produced by the department’s old methodology are shown in very light blue in the chart above; as you can see, they’re still higher than they were at any previous month on record.) So what accounts for the interminable length of unemployment? Layoffs during the Great Recession were unusually concentrated. Whereas in previous recessions a large swatch of American workers churned in and out of unemployment, this time around the ax fell on relatively few Americans. And as the economy has marched onward, this smaller group of workers has been left further and further behind. Some of those people had been structurally displaced — that is, they were in occupations or industries that were disappearing more permanently, or they were less productive workers to begin with — and that’s why it’s so hard for them to get new work. But for many Americans, unemployment begets unemployment. The longer a person is out of work, the less likely he is to find new work in the coming few weeks, whether because of stigma, less intensive searching, skill deterioration or other factors. So while American employers have picked up hiring, they are disproportionately hiring workers who have spent less time looking for a job. That leaves more of the long-term unemployed in the jobless pool — right now nearly half of those unemployed have been unemployed for at least six months — with each of those individual workers racking up even more weeks. The net effect is to pull up the overall average length of unemployment. One other potential explanation why people who have been unemployed a very long time have continued to stay unemployed is that jobless benefits last longer today than they had in the past. That may give an incentive for workers to keep actively hunting for jobs — a requirement for continued receipt of jobless benefits — whereas under different conditions they might have just given up, and therefore been no longer counted as unemployed. Alan B. Krueger, a Princeton economics professor and former Treasury official (and former Economix contributor), has more on that argument in this column.
Based on METROPOLITAN AREA EMPLOYMENT AND UNEMPLOYMENT – JANUARY 2011 published March 25, 2011
New York Times Blog Comparing Recoveries: Job Changes While the 216,000 net jobs that the economy added last month were certainly welcome, the growth wasn’t nearly fast enough to get the country back on the path to full employment anytime soon. The Great Recession dug the country’s job market into a very deep hole. As I mentioned in an earlier post, the economy today still has 5.3 percent fewer nonfarm payroll jobs than it had when the recession began in December 2007. If payroll growth continues apace with the gains experienced in March, it will take nearly three years for the economy to recover the jobs lost during the recession. The chart above shows what this long, slow slog would look like. The solid blue line shows the change in employment since the recession started over three years ago. As you can see, the line stops in March 2011, which is the most recent employment data point we have. The dashed blue line shows what employment would look like if the economy added exactly 216,000 jobs each month: As you can see, the dashed blue line finally reaches the level of prerecession employment in January 2014 — nearly three years from now. The dashed green line is one alternative, if unlikely, trend. It shows what job growth would look like if, from here on out, the economy had monthly job growth as strong as it was during the best month of the 2000s — 472,000, the number of jobs added on net in March 2000. Even at that (very optimistic) pace, payrolls would not recover the ground lost during the recession until July 2012. Even more depressingly, none of this takes into account the fact that the number of working-age Americans has been growing in the last few years, which means that if the economy were healthy it would have more jobs today than it had at the beginning of the recession.
New York Times (Online) Job Growth Suggests Resilience of U.S. Recovery The United States economy showed signs of kicking into gear in March, adding 216,000 jobs and prompting President Obama to proclaim a corner finally turned. The president and his fellow Democrats pointed to the latest jobs report on Friday, and to an unemployment rate that fell a touch to 8.8 percent, as evidence that their policies, like stimulus spending and the payroll tax cut, were working. All of this, they made clear, could become ammunition in their showdown with House Republicans, who have spoken of cutting deeply into the federal budget and have threatened a government shutdown. An emboldened Mr. Obama spoke of the political implications before several hundred workers at a United Parcel Service shipping center in Landover, Md. “ If these budget negotiations break down, we could end up having to shut down the government, just at a time when the economy is starting to recover,” Mr. Obama told the workers. “So given the encouraging news we received today on jobs, it would be the height of irresponsibility to halt our economic momentum because of the same old Washington politics.” Administration officials hit the same points over and over on Friday. The private sector has added, on average, 188,000 jobs in the first three months of 2011, and 1.8 million jobs since the recovery began. March was the 12th consecutive month of private sector job growth, and the stock market moved slightly higher on the report from the Labor Department. Manufacturing continued its unlikely — if still modest — revival in March, adding 17,000 jobs. Health care added 37,000 jobs in the month, and professional and business services added 78,000, although 37 percent of that came from increases in temporary help. The job figures for January and February were revised slightly higher, as well. Yet March’s numbers also offered more than a few cautionary signs that the national economy was not cured of all its ills. The ranks of Americans who have been without a job for 27 weeks or more remain painfully high, at more than six million. And the labor force has shrunk steadily since the beginning of the recession, to a point that just 64.2 percent of adults are either in the work force or looking for a job. That is the lowest labor participation rate in a quarter-century. For several months now, economists have expressed hope that unemployed Americans will take heart from signs of new hiring and re-enter the work force. That did not happen in March; the labor participation rate was unchanged. “ It is still a very inhospitable market for unemployed workers,” said Heidi Shierholz, an economist with the liberal Economic Policy Institute. “We still have five unemployed workers for every opening, and those are desperate times.” The average workweek, too, was unchanged, at 34.3 hours, and average hourly earnings remained static. Such indicators point to an economy with much slack demand, hints of deflation and little upward pressure on wages. Real earnings, the Brookings Institution noted on Friday, have fallen 1.1 percent in the last year. “ With excess supply of labor at very high levels, it is unlikely that we are going to see any meaningful acceleration in wage rates anytime soon,” Joshua Shapiro, an economist at MFR Inc., said Friday morning. Though the overall unemployment rate has fallen to 8.8 percent — from 8.9 percent in February and from a peak of 10.1 percent in late 2009 — the rate remains especially high for blacks, at 15.5 percent, and for Latinos, at 11.3 percent. (In 2007, black unemployment stood at 8.3 percent, and was 5.6 percent for Latinos.) In addition, local governments are experiencing a months-long bleed-off. Local governments have shed 416,000 jobs since an employment peak in September 2008, and dropped 15,000 jobs in March. Teenage unemployment remains off the charts and long-term unemployment is only a tenth of a point below its record peak, said Heather Boushey, senior economist at the Center for American Progress, a liberal group. “Although, after years of watching things get worse, it’s good to see overall employment growing.” The tension between Ms. Boushey’s two views of the economy, its deep problems and distinct signs of hope, can be seen in a Bureau of Labor Statistics summary that breaks the economy into 16 sectors. It shows construction workers with a 20 percent unemployment rate, and hotel and leisure workers at 13.2 percent. Yet the jobless rate has dropped in 13 of the 16 sectors since March 2010. It also poses a policy conundrum for the Federal Reserve, whose governors will meet in April to consider their interest rate policy. How should the board view the economy: Is the economic engine at last beginning to purr, in which case some argue for throttling back and raising rates later this year? Or are the weaknesses still pronounced enough that it makes sense to keep flooding the motor with inexpensive money? The Obama administration takes the view that it’s too early to raise rates. Recoveries from financial shocks as severe as that of 2008 are often long and sluggish, and they argue against risking another setback. Another question is what the midterm future augurs. Will jobs continue to expand through the spring, and with enough vigor — 300,000 a month, say — to substantially reduce the unemployment rate? As Ms. Shierholz said, if the economy adds 200,000 jobs a month, it will be 2019 before it reaches the employment rate that preceded this recession. Many economists speak optimistically of the coming few months. “The private sector of the economy has been the locomotive pulling the economy forward,” said Sung Won Sohn, an economics professor at California State University, Channel Islands. “Record exports, better-than-expected retail sales and the increase in business capital spending are part of the good news.” But some grow wary after that. The international storm clouds are many — spectacular debt problems in Europe, uprisings sweeping the oil-rich Middle East, and Japan’s many crises. The worry is that these ills might press on consumer and business confidence. “ The first half of this year will be the best job market that we’ll see in this whole expansion,” said David Levy of the Jerome Levy Forecasting Center. “After that, and looking toward 2012, the situation is questionable.” For now, the United States economy weathered last month’s global storms and still gained a healthy number of jobs. Austan Goolsbee, chairman of the President’s Council of Economic Advisers, sounded content to leave it at that, for now. “We don’t totally know the answer” about the effects of global turbulence, he said. “For now, it’s a good sign that you had winds in March that appeared to put a hit on consumer confidence and yet that did not slow the engine.”
Economic consulting firm Moody's Analytics has forecasted U.S. job growth by geographic region and by industry. This interactive was updated March 3, 2011. We will update it each month. This graphic shows actual job growth through fourth-quarter 2010 and Moody's Analytics' forecasted job growth for first-quarter 2011 through fourth-quarter 2014. It covers every state, the District of Columbia and 384 metro areas, broken down by fourteen industry sectors. The data are seasonally adjusted. National, state and metro data through fourth-quarter 2010 are averages of monthly data from the Bureau of Labor Statistics' Current Employment Statistics (CES) survey. The CES survey tracks the number of people employed full and part time by industry. It excludes proprietors, self-employed people, unpaid family or volunteer workers, farmworkers and domestic workers. Government employment covers only civilian workers. Employees are counted where they work, not where they live. The CES survey is based on a sample of businesses and government agencies and is subject to sampling and nonsampling error. As a result, precise employment rankings are not possible for all geographies and industry sectors. Industry sector estimates, especially for smaller geographies or industries, can be volatile due to smaller sample sizes. The data for first-quarter 2011 through fourth-quarter 2014 are forecasted by Moody's Analytics. Demographic trends such as population growth, migration patterns, the age composition of populations, cost of living and business costs, and the global orientation of regional economies are key factors in its forecasts. The forecasting model reflects the industry makeup of regions and the growth outlook for those industries. For example, the industrial Midwest takes into account the problems in the auto industry, and the relative success of the technology industry is reflected in forecasts for California's Bay Area and Boston. Moody's Analytics' model also takes into account policy decisions made by the Federal Reserve and the specifics of government stimulus and assistance programs.
Fortune Well, so much for the U.S. economy getting off to a fast start for 2011. Economists at Bank of America cut their first-quarter growth forecast to 1.5% Monday, saying rising commodity prices and flat wages are overwhelming the latest stimulus plan and squeezing consumer spending. BofA joins Goldman Sachs in saying the economy is softening in spite of the well publicized March job gains. Don't bank on a repeat The downgrade is only the latest by BofA, which came into 2011 predicting first-quarter gross domestic product would expand at a 3.3% annualized rate. It cut that forecast to 2.2% during the quarter, as the housing market weakened and durable goods orders disappointed, and trimmed its expectations again Monday. It conclusion this time is that surging food and fuel prices are soaking up the extra funds households are getting from last year's payroll tax cut – a trend that BofA expects to continue throughout 2011. &quot;Both short run and long-run forces argue for a weak consumer,&quot; BofA economist Ethan Harris writes in a note to clients Monday. Harris cites reduced credit availability, weak wage growth, a higher saving rate and unease over the fate of government benefit programs. Those factors were already in place late last year, when he and others were predicting the U.S. economy would rocket out of the gate at a 3%-plus clip in the first quarter. But the surge of gasoline prices above $3.50 a gallon and the steady rise in the market price of food commodities such as corn, wheat and sugar have blunted the force that many economists expected to drive growth in 2011 – the stimulus the government extended households by cutting payroll taxes. Meanwhile, those who see rising prices translating into higher labor costs – the sort of second-order effect that central bankers keep an anxious eye peeled for -- are simply not living in the same world as you and me. Unemployment is still near 9%, companies are still sitting on cash rather than hiring and few people are getting raises. &quot;The spike in energy prices is not causing stronger 'cost of living' wage increases; it is causing cuts in real pay,&quot; Harris says. He says squeezed consumers will keep growth tepid for the rest of 2011, though BofA is expecting the economy to expand 2.6% this year, as hiring picks up. Others see the same exasperating dynamic at work. &quot;Overall the March employment report provides further evidence of a broad-based hiring dynamic that is capable of generating self-sustaining growth,&quot; says BNP Paribas U.S. economist Julia Coronado. &quot;However there is still considerable slack that is restraining wage growth pointing to a growing conflict between firms and consumers in absorbing rising commodity prices.&quot; Growing conflict, just so. That, rather than the return of the consumer, is looking like the theme of 2011.
Source: Moody’s Analytics/DismalScientist.com * The euro zone's seasonally adjusted unemployment rate fell to 9.9% in February from 10% in the previous month (revised up from 9.9%). * Moody’s Analytics and the market consensus expect the jobless rate to remain unchanged from January. * The number of unemployed persons in the region fell to 15.75 million, from 15.82 million in January. * Spain has the highest unemployment rate in the euro zone. The jobless rate in the fourth largest economy in the euro zone was 20.5% in February, up from 20.4% in the previous month. Behind the Numbers The euro zone’s seasonally adjusted unemployment rate fell in February for the first time in four months. This suggests that the jobless rate has peaked. The breakdown of unemployment rates by country highlights the two-speed nature of the euro zone’s recovery from recession. Jobless rates fell in Germany and Belgium, and remained steady in France and the Netherlands. Meanwhile in Spain, the unemployment rate nudged up to 20.5% from 20.4% previously. Other fiscally troubled countries such as Greece, Ireland and Portugal, also suffer from elevated jobless rates. The weak recoveries and prospects in these countries have made businesses reluctant to hire. Major fiscal consolidation in most euro zone countries, which started in January, will keep the euro zone unemployment rate elevated in the coming months. In particular, countries across the region are significantly reducing their public sector workforce, which will put upward pressure on the jobless rate. Furthermore, the fiscal austerity measures will weigh on demand and eventually exports because the majority of Europe’s trade is intraregional. Weaker growth across the euro zone will discourage companies from hiring new staff. We expect the economic recovery to enter a slower phase from the second quarter of this year. Activity in the opening months of the year has been boosted by a colder than normal winter,which created pent-up demand.
Source: Moody’s Analytics/DismalScientist.com Downside Risks to Japan Forecast Easing, but Still Prevalent Coordinated intervention by central banks across the globe to prevent the Japanese currency from appreciating and further progress from authorities to bring the stricken Fukushima nuclear reactor facility under control are easing the downside risks to the recovery from the country’s worst natural disaster. But the anticipated rebound in activity in the second half of the year still hinges on restoration of full power to Japan’s capital region. Moody’s Analytics' preliminary forecast in the wake of the earthquake and tsunami anticipates lower private consumption and investment reducing GDP growth by 0.8 of a percentage point in the first half of the year, before the reconstruction effort boosts growth by 1 percentage point later in 2011 and into 2012. However, there are a number of downside risks to the forecast. Currency appreciation still threatens to harm export competitiveness. Fortunately, however, coordinated intervention by the world’s largest central banks to sell yen and buy U.S. dollars has arrested the appreciation of the Japanese currency. The unit continues to hover around ¥81 per U.S. dollar—more than 5% weaker than the record intra-day high of ¥76.25 in New York trade last week. The potential for a nuclear crisis to precipitate a wholesale erosion in consumer confidence is another key downside risk. A sharp decline in household expenditure would undermine the anticipated rebound in activity in the second half of the year, resulting in a deeper, prolonged recession. On a positive note, however, Japanese authorities have restored power to vital cooling systems in several of the reactors at the Fukushima nuclear plant, heralding a major step forward in preventing a nuclear meltdown. Despite some recent positive developments, the length of time Tokyo and surrounding areas are affected by rolling blackouts remains the largest downside risk to the recovery. Unlike the “V-shaped” rebound in industrial production witnessed in the month immediately following the Kobe earthquake in 1995, our revised forecast anticipates three months of subdued manufacturing activity. The current estimate of power restoration is by the end of April. However, making up for nearly 10,000MW of disabled nuclear power generation capacity will not be easy. If rolling blackouts extend into the second half of the year, this will weigh heavily on industrial output, undermining the reconstruction and rebuilding effort.
Source: Moody’s Analytics/DismalScientist.com February data indicate Japan’s labour market was in a very robust state in the early months of the year. The economy added 370,000 jobs on net during the month, easily absorbing the expansion in the labour force and a rise in the participation rate, resulting in the unemployment rate declining sharply to 4.6%. Unfortunately, the improvement will likely prove short-lived, as the destruction and decline in confidence following the Tohoku-Pacific natural disaster and Fukushima nuclear crisis exact a hefty toll on employment growth and business expansion in the near term.
Source: Moody’s Analytics/DismalScientist.com Real GDP expanded 8.2% y/y in the third quarter of the 2010-11 fiscal year (to 1.262 million crore rupees). This follows an 8.9% year-ago growth rate recorded in the preceding September and June quarters. Moody’s Analytics forecast an 8.3% y/y expansion, whereas consensus expected an 8.6% growth rate. At factor cost, the drivers of growth in the December quarter were the finance, insurance, real estate and business services sector, which expanded 11.2% y/y, following an 8.2% growth rate in the September quarter national accounts, and the trade, hotel, transport and communications sector, which slowed from 12.1% y/y last quarter to 9.4% in the December quarter. Agriculture, fishing and forestry output—which equates to roughly 17% of the economy—recorded a long overdue return to growth, expanding 8.9% y/y in the December quarter, following the 4.4% growth rate recorded in the year to September. Manufacturing output, which represents 15% of the economy, grew 5.6% y/y in the December quarter. At market prices, GDP grew 9.7% y/y in the final quarter of the 2010 calendar year, slowing from a downwardly revised 10.4% growth rate in the September quarter. Exports grew 16.2% y/y, private consumption expanded 9% from a year earlier, and business investment grew 6%. Government expenditure was 3% lower than a year earlier. The expenditure breakdown for India is not considered as accurate a measure of GDP as the industrial (or factor cost) measure, which remains the more widely reported figure. Behind the Numbers As expected, GDP growth slowed in the final quarter of the 2010 calendar year but remained an impressive 8.2%. Continued strong growth in key service sectors, along with a long-overdue recovery in agricultural output, meant the emerging economy recorded its fourth consecutive quarter of year-on-year growth in excess of 8%. The services sector, which accounts for more than 55% of GDP, remained the primary growth driver in the final three months of 2010. Activity in the finance, insurance, real estate and business services sector expanded at a double-digit pace, while trade, hotel, transport and communications activity recorded its sixth consecutive quarter of 8%-plus year-ago growth. In contrast, aggressive monetary tightening by the central bank was evident in manufacturing output slowing to 5.6% y/y in the December quarter—its slowest growth rate since mid-2009. An unexpected contraction in government expenditure was also responsible for the December quarter’s modest deceleration from September’s heady 8.9% growth rate. The outlook for India remains favourable; growth looks set to rival neighbouring China’s in 2011. A return to solid growth in the agricultural sector will complement strong expansion in services, propelling GDP growth towards the 9% mark. Policymakers' efforts to temper inflation should ensure the sustainability of the expansion, leading to further growth in employment and incomes, household consumption, and business investment.
Source: Moody’s Analytics/DismalScientist.com Chinese industrial production remains strong even as tightening measures take hold. Industrial production growth advanced 14.9% year on year in February, sharply higher than 13.5% in December. This release includes January and February data to offset New Year's distortions. In the first two months of this year, industrial production grew 14.1% compared with 13.3% in the January-February period 2010. Industrial production should remain around current rates for the first half of this year.
Source: Moody’s Analytics/DismalScientist.com Lima’s unemployment rate increased more than expected in February despite still-robust economic growth. According to the government’s statistics office, INEI, the open unemployment rate for Lima's metropolitan area averaged 9.1% in the December-February period, up from 7.7% in November-January. When compared with year-ago levels, the unemployment rate declined, however. Recent labor market figures show a slower pace in job creation even as the economy expands at a nearly double-digit pace. A slowdown in government spending might be behind such weakening in labor market conditions. The unemployment rate will decline in coming months as the summer ends and businesses start hiring more aggressively.
Source: Moody’s Analytics/DismalScientist.com The unemployment rate was reported at 6.4% in February, after 6.1% in January, according to figures released by the Brazilian Institute of Statistics, IBGE. The monthly figure was lower than the 7.4% reported one year before. The unemployment rate averaged 6.3% in the first two months. The amount of employed people reported no significant change in February, with respect to the previous month, but increased 2.4% from one year earlier. Behind the Numbers Unemployment continued to be influenced by the effect of the slow hiring season during the first two months of the year. The low level of activity and the cancellation of temporary jobs kept the unemployment rate with no improvement in February. Other than that, the labor market is benefiting from the economy’s labor requirements, since it keeps advancing further but with moderation. Hence, in February, the unemployment rate was reported at 6.4%, after 6.1% in January and 7.4% a year before. The unemployment rate averaged 6.3% in the first two months. The economy is converging to growth more consistent with production capacity this year. The domestic absorption will remain the main propeller of growth, in particular consumption and investment. The labor market will also moderate, thus helping reduce pressures on the demand for consumption and consequently on inflation.
Source: Moody’s Analytics/DismalScientist.com Low unemployment will drive consumption, an important component of economic growth in 2011.
Economic Data - April 2011
Reflective of the April 2011 National Jobs Report from the Bureau of Labor Statistics U.S. ECONOMIC DATA As of April 2011
PRIVATE SECTOR GROWTH TOPS 200,000 FOR SECOND MONTH RUNNING JOBS GAINED IN MARCH UNEMPLOYMENT RATE WORST UNEMPLOYMENT RATE SINCE 216,000 8.8% 1983 *Current recession excluded
Source: Labor Department UNEMPLOYMENT RATE DECREASES TO 8.8%
Source: CNNMoney.com A YEAR IN JOB GAINS AND LOSSES March 2010-March 2011
Source: Washington Post TWO YEARS IN UNEMPLOYMENT DATA
ere Source: US News & World Report RECESSION SNAPSHOT
Source: NYTimes.com Weeks unemployed AVERAGE LENGTH OF UNEMPLOYMENT
Source: NYTimes.com Percent unemployment BREAKDOWN OF UNEMPLOYED WORKERS
Leisure & Hospitality Construction Manufacturing Retail Legal Accounting Architecture/Engineering Finance IT/Technical Healthcare Temporary -1 +37 +17 +17.7 -.5 +20.2 +5.2 +6 +6.1 +36.6 +28.8 In thousands SECTOR CHANGES FOR MARCH
EDUCATION CONTINUES TO BE THE JOB SEARCH DIFFERENTIATOR…
<ul><li>March’s report was a good sign the recovery is really here, yet global happenings could slow the progress… </li></ul><ul><li>Opportunities </li></ul><ul><ul><li>The unemployment rate drop to 8.8% marks the fourth month of increasing employment </li></ul></ul><ul><ul><li>The gain of 230,000 private sector jobs is first time since 2006 the private sector has seen back-to-back gains of 200,000 + </li></ul></ul><ul><ul><li>The Temporary sector increased yet again with the addition of 28,000 jobs </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Unrest in the Middle East and Japan leaves much undetermined as to the potential effects on the U.S. job market </li></ul></ul><ul><ul><li>The average workweek remained stagnant at 34.3 hours </li></ul></ul><ul><ul><li>The average hourly earnings remained stagnant at $22.87 </li></ul></ul><ul><ul><li>Economists still expect the unemployment rate might rise again before steadily falling due to discouraged workers re-entering the job market </li></ul></ul>IN SUMMARY