The U.S. unemployment rate held steady at 9.7% for the third straight month in March as the world's largest economy added jobs at the fastest pace in three years – the most-certain sign yet that the worst job market in a generation is finally improving, economists say.
Factories, retailers and hospitals stepped up their hiring, and the overall employment market got a boost thanks to hiring related to the U.S. Census. Overall, the economy added 162,000 jobs for the month, with about a third of those gains coming from the Census. The private sector added 123,000 jobs, the most since May 2007. And the outlook ahead is good, since about 700,000 Census workers will be hired for the formal U.S. population count this spring.
"This recovery is for real," Chris Rupkey, an economist at The Bank of Tokyo Mitsubishi UFJ Ltd., said in a statement.
Still, there are causes for concern.
The worst U.S. downturn since the Great Depression has eradicated 8.2 million jobs. On average, there are five or six unemployed people competing for each opening, meaning there's ferocious competition for new positions. At the present rate, it could be four or five years before the jobless rate drops back to the more-normal range of 5% to 6%.
Nationwide, hourly earnings averaged $22.47 for March, a decline of 2 cents from the month before. Stagnant wages are a major reason that consumer spending is also stagnant. And in an economy that draws 70% of its power from consumer outlays during normal periods, stagnant earnings act as a major drag on the economic rebound.
As Money Morning Contributing Writer Jon D. Markman noted in a job-market analysis that appeared yesterday (Tuesday), the March unemployment rate of 9.7% was only 0.0008 percentage points away from being rounded up to 9.8%, meaning it would have represented the first increase in several months. From a market-psychology standpoint, that's a big difference.
In a bit of good news, the number of permanent-job losers declined by 234,000 to its lowest level in almost a year. The broad U-6 rate rose 0.1 point to 16.8%. But the number of workers who took part-time jobs for economic reasons was up 295,000. This "makes you wonder about the quality of jobs people are finding, a concern that is supported by the slippage in average earnings," Markman wrote.
Gallup's "underemployment" measure hit 20.0% on March 15 – up from 19.7% two weeks earlier and from 19.5% at the start of the year. Gallup classifies Americans as underemployed if they are unemployed or if they are working part-time but wanting full-time work.
On March 15, Gallup's unemployment rate was 10.3% – essentially the same as the 10.4% of March 1, but down from 10.8% in mid-February. However, this decline in the percentage of unemployed Americans was more than offset over the past 30 days by an increase in the percentage of those working part-time but wanting full-time work, from 9.0% in mid-February to 9.7% in mid-March.
Gallup's data suggest that while the U.S. unemployment rate has declined over the past month, the employment gains may be due to U.S. workers taking part-time jobs – even though they want to work full time, preferably in jobs in their chosen professions. But those jobs, in many cases, are either not available, or are tough to get because of the intense competition.
That brings us to next week's Money Morning "Question of the Week:" How confident are you in the U.S. jobs market? Do you feel that the U.S. employment outlook is getting better, getting worse, or essentially just holding its own? Are you in the job you want to be working in? If not, why not?
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News and Related Story Links:
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The U.S. Employment Outlook: Bad For Paychecks, Good For U.S. Stocks
- Cleveland, Ohio Business News:
U.S. unemployment rate stays at 9.7 percent in March
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