March 2010 Employment Report: Turn-up or Turnip?

According to the Bureau of Labor Statistics, the U.S. economy added 162,000 jobs in March. While some described the payroll jump as the "best gain in three years," a bit of digging reveals little to get excited about. For example, of those 162,000 jobs:

• 81,000 were generated from the BLS's birth/death model;
• 40,000 were hired by "temp" agencies; and
• 48,000 were temporary Census Bureau hires.

In other words, 169,000 of the 162,000 new jobs (yes, you read that correctly) were either potentially fictitious or temporary positions -- hardly the stuff of which sustainable recoveries are made.

Elsewhere in the report, the BLS revealed that the number of part-time workers increased, as did those who gave up looking for work. Also, the average workweek increased by only six minutes (to 34.0 hours, still near record lows) while average hourly earnings fell by two cents. These metrics demonstrate only tepid labor demand.

Finally, although 27 months have passed since the recession began, employment is still essentially six percent lower than the number of jobs that existed in December 2007 (click on graph above for a larger image).

In conclusion, taking the BLS employment report at face value could leave a bad taste in one's mouth -- much like eating turnips (apologies to those who actually like turnips).

We will have more to say about future prospects for employment in the upcoming April issue of Economic Outlook, available from Forest2Market.