Friday, April 02, 2010

Do the Jobs Figures Add Up?

Payroll figures were released by the Labor Department today, and something curious has occurred. The numbers being touted by wire reports and other media outlets don't seem to add up.

From the AP:
The nation's economy posted its largest job gain in three years in March, while the unemployment rate remained at 9.7 percent for the third straight month.

The increase in payrolls is the latest sign that the economic recovery is gaining momentum and healing in the job market is beginning. Still, the healing is likely to be slow, and most economists don't expect new hiring to be fast enough this year to rapidly reduce the unemployment rate.

The Labor Department said employers added 162,000 jobs in March, the most since the recession began but below analysts' expectations of 190,000. The total includes 48,000 temporary workers hired for the U.S. Census, also fewer than many economists forecast.

Private employers added 123,000 jobs, the most since May 2007.
If the private sector hired 123,000 jobs, and the federal government hired 48,000 temporary workers, that would be 171,000 jobs created, not 162,000 jobs. So why the discrepancy? Well, you'd have to read deeper, as per the CNBC article:
In the goods-producing sector, manufacturing added 17,000 jobs in March and construction payrolls grew 15,000. Payrolls in the services sector increased as retail employment climbed 14,900. Government employment increased 39,000, reflecting the temporary hiring for the census.
It's only when you read deeper into the articles that you find out that the jobs created aren't what they seem, and that the number of temporary jobs created by the census may have been inflated or misrepresented, because when you add government employment to the 123,000 private sector jobs, you get the 162,000 figure.

However, any way you look at it, the jobs figures are putrid because much of the job creation is fleeting - the census jobs are temporary, and the private sector hiring remains far below what is necessary to get people working again in sufficient numbers.

One bright spot is that the number of hours worked increased slightly, increasing pressure on hiring since once you cross a threshold of overtime costs, employers may find it cheaper to hire new workers rather than add overtime.

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