The Bureau of Labor Statistics announced this morning that 120,000 nonfarm jobs were added to the U.S. economy in March. The unemployment rate is now 8.2%, down from 8.3% a month ago. (All numbers are seasonally adjusted.)
Nevertheless, this is a disappointing report, since most analysts were expecting something like 200,000 new jobs. We need to add somewhere around 100,000 jobs per month just to keep pace with population growth.
As I have noted often, these two data points can be a little confusing sometimes, since they come from two separate surveys.
A survey of establishments with payrolls determines the jobs estimate. A survey of households — which has a broader definition of the word “job” than the establishment survey — determines the unemployment rate, which is heavily contingent on the rate of workforce participation.
These different methodologies contribute to the fact that the unemployment rate and the jobs numbers don’t always seem to be moving consistently together. That’s the case today, with a disappointing new jobs number but a still-declining unemployment rate.
Among the few bright spots:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 8.1 to 7.7 millionover the month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
The key reason for the decline in the unemployment rate was a slight decline in the seasonally adjusted number of people in the labor force. That could be the result of seasonal factors related to warm weather or to the statistical method.
The civilian noninstitutional population grew by 169,000 in March, but the number of Americans participating in the labor force fell by 164,000.
So the unemployment rate decline is of little significance.
I’ll post something about U-6 unemployment in a few minutes.