Friday, April 2, 2010

Quick note on March job numbers

The top-line number is cautiously good news, 162,000 new jobs in March. That means the main unemployment rate remained at 9.7% Basically, the job market has stabilized. Unfortunately, we need much more robust jobs growth in order to bring the top-line unemployment rate down to acceptable levels. I think the number Paul Krugman threw out a while back was something like 600,000 new jobs per month. Clearly, we're nowhere near that yet, but this is the biggest jobs increase in three years, so it's a positive sign.

Unfortunately, buried in the numbers are a couple not-so-good signs. First, U6, the number that includes underemployed people and those who've given up looking for work crept up from 16.8% in February to 16.9% in March. That number had looked like it peaked, so it's disappointing to see it go back up.

The percentage of unemployed workers who've been out of work for 15 weeks or longer rose, as did the percentage unemployed for 27 weeks or longer. This is particularly troubling, as many studies have shown that a long duration of unemployment has effects lasting decades into the future. Workers' skills atrophy, and they tend to earn less over the rest of their working days.

Finally, the unemployment rate among African-Americans continued to rise. The overall rate is now 16.5%, and an even more staggering 19% among black males age 20+. Among black teens aged 16-19, the unemployment rate is a mind-boggling 41%, compared to white teens at 23%.

Clearly, there is still work to be done. Unfortunately, congress seems to be unwilling to pass anymore meaningful stimulus. If nothing else, we need to keep unemployment benefits flowing, so that the unemployed are able to help prop up demand. Consumer demand will bring us out of the recession, but it's also what got us into the recession. I don't envy Sec. Geithner or the folks at the Fed.

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