March jobs report is worst since October

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Bill Harris of Brooklyn looks over job listings on a computer at a New York State Department of Labor Employment Services office March 3, 2011 in Brooklyn Borough of New York City. Harris has been out of work since July 2010 and works in the security business.

Article Highlights

  • March was the worst #jobs report since last October

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  • The economy added 120,000 #jobs in March, about half the pace of the previous three months

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  • Retail employment is moving in the wrong direction given the overall strength in the economy

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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.

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About the Author

 

Kevin A.
Hassett
  • Kevin A. Hassett is the State Farm James Q. Wilson Chair in American Politics and Culture at the American Enterprise Institute (AEI). He is also a resident scholar and AEI's director of economic policy studies.



    Before joining AEI, Hassett was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at Columbia (University) Business School. He served as a policy consultant to the US Department of the Treasury during the George H. W. Bush and Bill Clinton administrations.

    Hassett has also been an economic adviser to presidential candidates since 2000, when he became the chief economic adviser to Senator John McCain during that year's presidential primaries. He served as an economic adviser to the George W. Bush 2004 presidential campaign, a senior economic adviser to the McCain 2008 presidential campaign, and an economic adviser to the Mitt Romney 2012 presidential campaign.

    Hassett is the author or editor of many books, among them "Rethinking Competitiveness" (2012), "Toward Fundamental Tax Reform" (2005), "Bubbleology: The New Science of Stock Market Winners and Losers" (2002), and "Inequality and Tax Policy" (2001). He is also a columnist for National Review and has written for Bloomberg.

    Hassett frequently appears on Bloomberg radio and TV, CNBC, CNN, Fox News Channel, NPR, and "PBS NewsHour," among others. He is also often quoted by, and his opinion pieces have been published in, the Los Angeles Times, The New York Times, The Wall Street Journal, and The Washington Post.

    Hassett has a Ph.D. in economics from the University of Pennsylvania and a B.A. in economics from Swarthmore College.

  • Phone: 202-862-7157
    Email: khassett@aei.org
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