The March jobs report contained some of the good news that analysts have been waiting for. First, private hiring increased by 123,000 jobs, with every sector except financial and information adding jobs. Second, revisions to the employment reports of the previous months were revised upwards. Third, the unemployment rate remained flat at 9.7 percent, despite a tick up in the labor force. (Often, the unemployment rate increases as workers return to the labor force after the worst of a recession has passed. In this case, the labor force increased by 398,000, with most of the workers finding jobs, according to the household survey.) Fourth, both the household and establishment surveys are pointing in the same direction — showing job growth. Finally, hours worked continued its upward climb, matching this recovery’s January high.
There is some volatility to these numbers, as teenagers accounted for almost a third of new entrants into the labor force. The teenage unemployment rate sharply increased to 26.1 percent as many of the teenagers were unable to find work. But 325,000 adult men also entered or reentered the labor force, and enough of them found jobs to keep their unemployment rate at 10.0 percent. Overall, the labor force participation has climbed for four straight months but is still well below the pre-recession level.
So, the good news is that hiring has resumed and job growth should be consistent throughout the rest of the year. The bad news is that job growth is not yet robust enough to lower the unemployment rate. While hiring is likely to increase as the recovery strengthens, the labor-market recovery is going to be quite slow, especially as compared to some of the previous recessions. Part of the slack of the labor market is indicated by the fact that nominal earnings per hour actually fell in March. This slight dip is due in part to the new hires coming in at entry-level positions with commensurately lower pay. Long-term unemployment is going to remain a problem as the average duration of unemployment now exceeds 31 weeks, a new high.