Employment Update: March 2012

Something of a wave of high expectations came ahead of the actual release of data this Friday by the Bureau of Labor Statistics (link). The Wall Street Journal reported that expectation this morning, hoping for an employment increase of 200,000, the consensus of economy watchers. And, I think, the economy watchers thought that they were being cautious. The actual reported number last month was 227,000. The Journal even lamented the fact that no markets would be open today (Good Friday) and hence the exuberance would not be immediately felt by the markets.

Well, the data are in. And they fall well below expectations. Job gains in March were 120,000—thus continuing what I called “business as usual” last month. Two steps forward, one step back. Nor did the revisions of last month’s result bring much cheer. Last month’s results were adjusted upward, to be sure, but only by a mere 4,000 jobs, to 231,000. This month the Retail sector showed a sizeable loss in employment (33,800 jobs); but even if that sector had been neutral, we’d still not have achieved the anticipated 200,000.

What we are seeing in formation here is a kind of Appalachia of jobs growth—not the steep rising of the Rockies. Overall, looking at the 8.7 million jobs lost in 2008 and 2009, we have recovered 5.2 million jobs in two years and still counting, thus 40.4 percent—a 1.4 percent increase this month. Better gains than losses, I say. But it really does make me wonder whether maybe something’s wrong with the foundations—at least of our expectations.