Friday’s Jobs Report In Line with Reduced Expectations

By:  Bob Adelmann
Friday’s Jobs Report In Line with Reduced Expectations

Friday's jobs report from the Bureau of Labor Statistics buttressed the position of many who have seen a widening disparity between Wall Street's enthusiasm and Main Street's gloom over the health of the economy.

Friday’s report from the Bureau of Labor Statistics (BLS) only surprised those with unrealistic expectations about the health of the economy, showing that job growth of just 88,000 new jobs in March not only was far less than the 200,000 jobs the establishment economists had predicted, but half of the average job growth over the last 12 months. The retail sector, which previously had shown some strength in part-time and temp workers, faltered significantly, dropping by 24,000 jobs last month compared to average monthly gains of 32,000 over the last six months.

Although the unemployment rate dropped slightly, most of that was due to an overall shrinkage in the work force, as nearly 500,000 workers stopped seeking work altogether. That participation rate, according to the New York Times, “has not been this low — 63.3 percent — since 1979 … [with] discouragement about job prospects in a mediocre economy [seeming] to be playing a large role [in that decline].”

The quality of the jobs being created is also in question. As a report from the National Employment Law Project observed, the majority of jobs lost during the Great Recession was in “the middle range of wages,” but most of those gained during the recovery “have been low paying.” And temp jobs have increased as well, as employers have found it more efficient to hire them and keep them as temps rather than moving them into full-time positions with the benefits, and pitfalls, of providing them with healthcare and retirement plans. Many small companies are electing to stay small and employ temporary workers who work less than 30 hours per week, in order to avoid offering them health insurance as mandated under ObamaCare.

Weakness in jobs growth was predicted by Lakshman Achuthan of the Economic Cycle Research Institute (ECRI), and his call that the U.S. economy entered a recession last summer was buttressed by the latest jobs report.

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