04.01.2011 News Releases, Policy Points

A Bit Of Labor Market Momentum

CHAPEL HILL (April 1, 2011) – The national economy netted 216,000 payroll positions in March. This marked the sixth consecutive month of job growth. While strong by recent standards, the March level of payroll growth failed to alter the basic employment picture. In fact, the unemployment rate and associated measures of joblessness and labor utilization changed little last month. These findings come from the latest national employment report.

“Net job growth of 216,000 positions in March represents a real step forward,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the past two months, payroll employment has increased at a level not seen in several years. Moreover, the growth is insufficient to undo the damage caused by the 2007-09 recession.”

In March, the nation’s employers added 216,000 more payroll positions than they cut. Gains occurred entirely within the private sector (+230,000), while government payrolls fell by 14,000 positions due to payroll reductions by local governments. In recent months, payroll cuts by local governments have held back job growth. Additionally, the payroll employment numbers for January and February were revised upwards. With the revisions, the economy netted 262,000 jobs over those two months rather than the 255,000 positions previously reported.

Private-sector gains in March occurred primarily in professional and business services (+78,000), education and health services (+45,000), leisure and hospitality services (+37,000), and retail trade (+17,700). With the exception of the construction and information industries, all other private-sector industries grew in March.

“The March employment report suggests that a level of job growth has taken hold in the United States,” noted Quinterno. “Over the past two months, net job growth has averaged 205,000 positions, but the pace is insufficient to replace the jobs lost during the recession.”

The inability of the current pace of job growth to alter employment conditions was reflected in the March household survey. Last month, 13.5 million Americans (8.8 percent of the labor force) were jobless and seeking work. While the unemployment rate and number of unemployed individuals fell over the past year, so did the size of the labor force. In March, the share of the population participating in the labor force (64.2 percent) was not only lower than one year ago, but also was at a level last seen in the early 1980s.

Last month, proportionally more adult male workers were unemployed than female ones (8.6 percent vs. 7.7 percent). Similarly, unemployment rates were higher among Black (15.5 percent) and Hispanic workers (11.3 percent) than among White ones (7.9 percent). The unemployment rate among teenagers was 24.5 percent. Between February and March, unemployment rates for most every major demographic group were little changed.

Furthermore, nine percent of all veterans were unemployed in March. The unemployment rate among recent veterans (served after September 2001) was 10.9 percent.

“Despite the growth in payroll employment, jobs remained difficult to find in March,” added Quinterno. “Last month, the underemployment rate equaled 15.7 percent. Among unemployed workers, 45.5 percent had been jobless for at least six months with the average spell of unemployment lasting for 39 weeks.”

“The March employment report suggests that labor market conditions have stabilized and that the private sector is adding jobs, although some of that growth is being canceled out by job losses in the public sector,” observed Quinterno. “Unfortunately, the recent improved level of growth simply is not good enough to reverse the damage caused by the recession. If the March rate of job growth were maintained, holding all else equal, it still would take several years to replace the more than seven million jobs lost since December 2007.”

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