162,000 jobs were created in March, U.S. says

Increase is biggest in 3 years

unemployment rate still 9.7%

April 03, 2010|By Don Lee | Tribune Newspapers

WASHINGTON — — The U.S. economy added 162,000 new payroll jobs in March, the Labor Department said Friday, marking the first sign of substantial job growth since the recession and the largest one-month increase in three years.

The job gains, however, weren't strong enough to bring down the unemployment rate, which remained at 9.7 percent in March for the third month in a row. And economists were cautious, saying they expect the labor market recovery to be slow.

Part of the job increase in March, 48,000 positions, came from the hiring of temporary workers by the Census Bureau. But the private sector generated 123,000 jobs last month, more than many analysts projected.

Manufacturing payrolls expanded for the third month in a row, and the harbinger temporary-help industry added 40,000 workers in March. Financial services and the information industry lost jobs, but health care, education, retailers and the leisure industry added to their payrolls.

"It's the first month of really solid growth," said Bart van Ark, chief economist at the Conference Board, a business-membership and research organization in New York. "We see the job gains spreading across the economy."

Adding to the positive news, the government revised upward the count of the nation's payrolls for the first two months of the year. It said the economy created 14,000 jobs in January instead of losing 26,000 as previously reported. And the losses in February were shaved by more than half, to 14,000.

Some of the private-sector payroll gains in March might have been slightly inflated by the restoration of work temporarily halted in February because of the snowstorms. Even so, the American economy added an average of 54,000 jobs monthly in the first quarter - a turnaround from losses averaging 752,700 jobs a month in the first quarter of 2009 and 89,700 in the final quarter of last year.

"That's a positive trend," said Heidi Shierholz, a labor economist at the Economic Policy Institute, a think tank in Washington. "The bad news is that it's not nearly enough to move the dial on unemployment."

Without the statistical rounding, the unemployment rate actually rose to 9.74 percent last month from 9.68 percent in February. That's because as the economy recovers and hiring prospects look better, workers sidelined by the recession are starting to return to the labor force in search of jobs. They will be joined this summer by a flood of fresh graduates, which together could push up the unemployment rate in the coming months.

Analysts say the economy needs to create about 125,000 jobs a month to keep pace with population growth, but many more than that will be needed to bring down the unemployment rate depending on how fast people pour into the job market.

The report Friday "is not a signal that the private sector is poised to create the kinds of numbers of jobs to put many people back to work," Shierholz said.

The ranks of the unemployed grew last month by 134,000 to exceed 15 million. And a record 44 percent of these workers, or more than 6.5 million, have been jobless for six months or longer - an increasingly worrisome social and economic situation as many of them are losing their skills and struggling to compete for jobs.

A broader measure of unemployment and underemployment, which includes part-time workers who want full-time jobs, rose a notch to 16.9 percent in March, the Labor Department said.

At the White House, Christina Romer, chair of the Council of Economic Advisors, called Friday's employment figures the "most positive jobs report we have had in three years."

Still, she said, "There will likely be bumps in the road ahead."

With more than 8 million Americans having lost jobs since the recession began in December 2007, she added, "further targeted actions to spur private-sector job creation are critically needed to ensure a more rapid, widespread recovery."

Over the next couple of months, the economy will get a temporary boost from the Census Bureau's hiring of hundreds of thousands of workers to knock on doors and collect data for the constitutionally mandated decennial count of the nation's population. But most of those jobs will be part time, paying $10 to $20 an hour, and will likely last just a few weeks, according to government reports and private economists.

It remains to be seen whether private employers will pick up the pace of hiring to drive down the unemployment rate. Thirteen states and the District of Columbia reported double-digit unemployment rates in February.

With strong productivity gains and only moderate U.S. economic growth projected for this year, many analysts do not see robust private-sector job growth taking place any time soon.

Van Ark of the Conference Board said the hiring outlook is clouded by weak consumer confidence and incomes, as well as reluctance on the part of many businesses to invest. Residential real estate investment remains sluggish, he said, and gains in corporate spending for equipment and software have been fading more recently.

"I think the economy is undergoing a structural transformation," he said. "It's too early to say we have a sustainable recovery."

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