The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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April 02, 2010

Still a ways to go

The March employment report, as probably should have been predicted, was a mixed bag of pretty good news (fairly strong gains in private payroll jobs and upward revisions for January and February), some not-so-great news (a decline in average hourly earnings, long-term unemployment still on the rise, and an increase in people working part time "involuntarily"), and lots of data that are hard to interpret. In the hard-to-interpret category, I'd put the continuing rise in the temporary employment category (is it a leading indicator of further employment gains, as has been the case historically?), increases in construction employment (just the weather?), and strength in manufacturing employment (a blip in a sector that generally does not provide much job growth, or the early stage of a return to prerecession levels, implying we have about two million manufacturing job gains to go?).

What does seem clear is that the pace of net job creation is still well below the levels required to appreciably improve the unemployment rate or to make a sizable step toward regaining the eight million-plus jobs lost since the beginning of the recession. Updating a calculation referenced in a speech by Atlanta Fed President Dennis Lockhart on Wednesday, at a pace of 162,000 jobs added per month and at the current labor force participation rate, unemployment this time next year would still be just north of 9 percent.

Not great, but at least, to use President Lockhart's phrase, "we are, finally, moving in the right direction."

UPDATE: At Angry Bear, Spencer notes notes that the employment diffusion index, which is a measure of the breadth of job gains, is improving. Jim Hamilton puts the employment report in a class of several other pieces of good economic news. But Dean Baker emphasizes the weak gain in earnings (link courtesy of Mark Thoma).  Calculated Risk documents the historical correlation between housing starts and unemployment and highlights the unusually high levels of long-duration unemployment. So does Catherine Rampell, who also puts recent cumulative job performance in historical perspective.  David Beckworth breaks down the employment gains by industry (hat tip, Capital Spectator.)   Barry Ritholtz offers an array of interesting charts.  At Real Time Economics, highlights from the Bureau of Labor Statistics' first public chat session.

By Dave Altig, senior vice president and research director at the Atlanta Fed

April 2, 2010 in Data Releases , Labor Markets | Permalink


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Not great, but at least, to use President Lockhart's phrase, "we are, finally, moving in the right direction."

:).. sure... dream on...

in mar 2010 US GOV paid more 16 bln $ in unempl benefits .. all time record and almost 50% more than in mar 2009..


Posted by: alex west | April 04, 2010 at 01:26 AM

If you are a small business, why hire permanent employees? I would get by with temps as long as I could. Big tax increases next year, along with more uncertainty.

Generally big government programs benefit big business. The little guys get whacked. Job growth comes from the little guys.

Was with an international tax expert the other night. He said cash is building on US companies balance sheets. US companies are looking ripe for takeover by foreign companies that pay less corporate taxes. The tipping point in his opinion is here. Would not surprise him to see big conglomerates like Siemens start to buy up US companies that fit into their business.

Looking at income numbers in the US tells me that while we may have seen the depth of the recession, we have not seen the end of it. Will be awhile before we hit a strong uptrend.

Posted by: Jeff | April 04, 2010 at 10:15 AM

Household survey figures have been improving since the end of the year. That survey tends to lead the establishment survey at major turns.

The Birth/Death Model comes under considerable criticism. Why does the government not take advantage of private surveys such as the ADP employment survey? The B/D figures often require substantial adjustment well after the reported date.

Posted by: Les | April 05, 2010 at 10:32 AM

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