This was the worst jobs report since last October. The economy added 120,000 jobs in March, about half the pace of the previous three months. The futures markets are responding as if this report is extremely disappointing, but that seems like an overreaction. "At times like this, the right signal to draw from a report is the three-month moving average, which smooths out the seasonal effects." -Kevin A. HassettThe fact is, the weather has been about as good as it has been in a century. Warm, dry weather in January and February meant that a statistically typical number of weather-related disruptions didn’t occur, inflating those jobs numbers. March weather was great too, but weather starts to get better that time of year anyway, so a mild March is less of a plus than a mild January. At times like this, the right signal to draw from a report is the three-month moving average, which smooths out the seasonal effects. That is currently at 212,000 jobs created per month, and that feels about right to me. A reason for confidence is the continued strength in manufacturing still looks strong, which is consistent with the capital spending data we have been seeing.

That said, one reason that the markets seem to be disturbed about this disappointment is the weakness in Europe which, combined with high oil prices, raises at least the specter of a recession this year. Southern Europe is probably in recession right now, and fears that this will spread are legitimate.

One trend to watch: Retail employment is moving in the wrong direction given the overall strength in the economy. It may well be that the “Amazon Prime” effect is gaining steam. As more commerce switches to the Internet, brick and mortar retailers are clearly struggling.

Kevin A. Hassett is a senior fellow at AEI.