U.S. Added 192,000 Jobs in March; Jobless Rate Holds
Source: NELSON D. SCHWARTZ
The economy created 192,000 jobs in March, better than during the depths of winter but still short of the labor market rebound that many experts had been hoping to see last month.
Still, in one hopeful sign, the Labor Department said the proportion of Americans in the work force rose slightly, as the number of people looking for work increased, suggesting workers were being lured back into the job hunt as openings began to appear.
Another encouraging signal was a revision upward by government statisticians of the number of jobs added in January and February, with employers adding a total of 37,000 more positions than first thought.
The unemployment rate remained flat at 6.7 percent, but that was almost entirely because of an increase of a half-million people in the labor force. That follows healthy gains in the labor force since the beginning of the year.
If it were not for the increase in the size of the labor force, the unemployment rate would have fallen to 6.5 percent.
While the return of Americans to the job hunt is certainly good news, it underscores just how much slack remains in the economy five years into the recovery.
It also means that the unemployment rate is unlikely to keep falling as sharply as it has in the last two years, because people who are again looking for work are counted as unemployed, while those who have given up and dropped out of the labor force are not.
The plunge in the unemployment rate ― to 6.7 percent now, from 8.2 percent in March 2012 ― has encouraged policy makers at the Federal Reserve to slowly begin easing back on their stimulus efforts.
But even as that so-called tapering process continues as expected for the remainder of 2014, a stabilization in the unemployment rate between 6.5 and 7 percent suggests the Fed will be in no hurry to raise short-term interest rates.
“The jury is out, but tapering continues,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
He added that the March report provided ammunition for both optimists and pessimists at the Fed, with the pessimists pointing to the still-elevated unemployment rate even as policy makers who favor tighter monetary policy focus on the increase in payrolls.
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