March Unemployment: The Rorschach Jobs Report

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March’s unemployment numbers were mediocre enough to be open to any number of interpretations. Republicans see evidence that the President’s policies have taken us off track. Obama just called it another bump in the road. Here are two reasons to despair and two reasons to celebrate about the latest data:

This might be that weak growth Ben Bernanke warned about kicking us in the pants. The job market typically follows economic growth. As the following chart shows, the economy is not accelerating out of the slow start to its recovery–change in real GDP is what it was in late 2009, early 2010.

The unemployment rate (now 8.2%) fell for all the wrong reasons in March. The labor force is contracting as people give up looking for work, meaning that the rate drop isn’t really good news. It also means that if the jobs market picks up again, the rate may rise. Obama boosters patting themselves on the back for getting near the mentally significant 8% unemployment figure shouldn’t get too excited.

The massive public-sector brake on the recovery appears to be disengaged. In 2011, federal, state and local governments were losing 22,000 jobs a month, creating significant drag on the sputtering recovery. For three months, public sector losses have been almost nonexistent. March saw only 1,000 government positions cut.

Jobs reports are estimates and even changes in BLS’s monthly figures can sometimes be chalked up to statistical noise. If you average out the jobs reports by quarter, the trend looks decent. 120,000 jobs in a month is not good, make no mistake, but the monthly mean for the first quarter of 2012 is in the neighborhood of 220,000 jobs added a month. That’s definitely an improvement and probably a number Obama could be happy with through November.

(Charts via the indispensible CPBB, EPI and Jared Bernstein.)