The Bureau of Labor Statistics announced labor figures for the month of March today. The figures showed that 120K jobs were added in March. The unemployment rate has remained steady at 8.2%. Analysts were expecting 210,000 jobs to be added and had anticipated the unemployment level remaining at 8.3%. The figures today showed the labor market to be increasing below trends seen earlier in the new year. February saw 227,000 jobs added. The ADP payroll projection portrayed figures much higher than today’s release. That report had shown an additional 209,000 jobs in the economy.
Despite today’s numbers the labor market is recovering at a fairly steady rate and is bolstering the overall US recovery. The rebound of the labor market is seen as a key factor in any recovery in the United States. Last October the country’s unemployment rate hit 10%, a figure which hadn’t been seen since the 1980s, almost thirty years ago. The current level of 8.3% is not sustainable in the economy but may be difficult to move quickly downward given pressures in the labor market. The US will almost certainly be dealing with unemployment problems for some years. Today’s figures will cause worry for policy makers who will hope March’s figures are an outlier.
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Though the steady recovery is increasing confidence in the economy it may not be enough to complete a full recovery in any reasonable medium term period. An average of 200-250k jobs added every month sounds like a lot but would not manage to clear unemployment queues for some years. A much more rapid recovery seems unlikely and the natural increase in the workforce is providing a dampner on any added jobs. The US workforce is expected to increase by around 1.2 million per year. An increasing workforce is vital for a country that fears buckling under the weight of its social security system but does not have a positive effect on one recovering from mass unemployment.
As the race for the Whitehouse heats up with the Republican Party seeming to finally be getting behind Mitt Romney as its nominee the labor market will become an important political tool on both sides. The incumbent administration will point to the growth in jobs as a sign of recovery and confirmation that its policies are working while the Republican party will surely highlight the continued levels of high unemployment as evidence of the opposite. Whichever side is ultimately successful in November will rest much on their policies regarding US recovery and their presidency will still be marked by the struggle to rebuild the economy back to its potential.