The highly anticipated March jobs report out today supported what U.S. Federal Reserve Chair Janet Yellen said earlier this week: The job market is not back to normal and the Fed has more to do on the unemployment front.
This morning, the U.S. government announced that the economy barely missed expectations of 200,000 new jobs in March 2014, adding 192,000 jobs. The unemployment rate remained unchanged at 6.7%.
The lukewarm announcement was cheered mainly for its revisions for previous months - revisions from the January and February jobs reports added 37,000 positions.
However, there isn't much reason to cheer, because the economy is still struggling to gain traction.
"The BLS jobs report released this morning shows an economy that has been stuck in second gear for months," Steven Pressman, Professor and Economics and Finance at Monmouth University in Long Branch, NJ, told Money Morning. "Since November, the U.S. economy has created a bit under 200,000 jobs each month and the unemployment rate has been steady at 6.7%. This report is consistent with and reinforces recent GDP reports showing the U.S. economy has been growing (a bit under 2% annually), but not growing fast enough (3-4%)."
The U.S. jobs recovery is indeed moving at a snail's pace. It's the slowest on record since the Labor Department started tracking data in 1939.
Moreover, the United States hasn't endured such elevated long-term unemployment since the Great Depression.
The biggest hurdle has been an anemic economic recovery. The economy has only grown by an annual average of 2.25% since 2010. That's handily below the historic 3.3% pace of U.S. growth since 1929.
"We need to create around 300,000 new jobs each month in order to get the unemployment rate down to something approaching full employment," Professor Pressman continued. "Around 200,000 new jobs are necessary each month for our growing labor force. But the economy also needs to create jobs for millions of American currently unemployed. At present, we are not doing this."
Doubtful amid the Fed's quantitative easing tapering, and a heavy debt load saddling consumers, Professor Pressman "doesn't see who is going to help shift the economy into third gear and get unemployment down to [a healthy] 4%-5% anytime soon."
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Following are a dozen highlights from the March report.
12 Key Takeaways from the March Jobs Report
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