In unveiling its employment data for March, the Bureau of Labor Statistics noted that 120,000 nonfarm jobs were added to the economy that month, with losses in retail jobs and construction offset by gains in manufacturing and food service and drinking places. As delighted as we are that more people are employed in bars across America, there are reasons to be less than enthusiastic about these numbers. Gains of 200,000 for the month had been anticipated, based on the numbers for the past half-year.
In a sober assessment of the report, Gary Burtless of the Brookings Institution suggested that these numbers are the bellwether of a slowing jobs picture in the coming months.
In sum, the March 2012 employment report shows little progress toward reaching full employment. The unemployment rate fell because fewer jobless workers were actively seeking a job, not because more Americans found one. The employer survey showed payroll gains of 120,000, but this is only slightly faster than the rate of job gain needed to keep up with the growth in the working-age population. After six months of robust job gains, a mediocre report in March may signal the start of slower improvements in the next few months.
Likewise, Rea Hederman, Jr., of The Heritage Foundation, noting that there was a slight decrease in the unemployment rate from 8.3 to 8.2 percent, said that even this “reflected ill fortune, because it was due entirely to a marked shift of workers leaving the labor force instead of finding new jobs.”
The implications of these disappointing results are clear for the Obama administration. In January of 2009 the administration’s economic team predicted that unemployment would peak at 8% in the third quarter of 2009 and decrease thereafter under the influence of the President’s stimulus package. In fact, as Republicans regularly remind the public, unemployment has not fallen below 8% for the entire time the President has been in office.
The general election is only seven months away, and, now that Mitt Romney is the presumptive Republican nominee, he will be able to use the persistently high unemployment rate for the past three years as a powerful argument for political change.