Friday, April 1, 2011

Friday’s Jobs Report March 2011

The March unemployment rate hit a two-year low at 8.8 percent in March. Nonfarm payrolls gained 216,000, with private-sector employment rising by 230,000.

After adding 192,000 jobs in February, most economists believe Friday's jobs report would indicate weather the economy is finally gaining some flying speed or not, which makes it so critical.

Fortunately, there was lots of good news in Friday’s jobs report.

As Labor Department announced, the economy added 216,000 new jobs last month. Factories, retailers, education, health care and an array of professional and financial services expanded payrolls.

Private employers added 230,000 jobs last month, on top of 240,000 in February. It was the first time private hiring topped 200,000 in back-to-back months since 2006.

The Street has been clouded for a while by the higher oil prices and complicated political conditions in Africa and the Middle East, renewed weakness in the housing market, uncertainty about the federal deficit, influence of sovereign debt crises in Europe, and supply chain disruptions from the Japanese crisis. Friday's jobs report made a lot of people cheer, and the stock market is rallying today, but there are still some hidden signals in this report to take into account.

Though the unemployment rate is dropping, the number of people who remain unemployed is still considerable: 13.5 million people would like to work, but can’t get a job, and nearly half of them have been out of work for 27 weeks or more.

As Capital Economics said in a note today, "if the rate is only falling by 0.1% each month, it would take another three and a half years to get back down to the pre-recession level." Payroll employment stood at 130.7 million in March, still down 7.2 million from the peak in December 2007.

Lorena Li

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