American employment gains were solid in March for the second consecutive month, providing more evidence to support the moderate U.S. economic growth story. Even stronger job gains could be on the horizon as major companies have largely exhausted productivity gains with prior employment levels.
The U.S. economy added 216,000 net new jobs during March, slightly stronger than the consensus forecast of a 190,000 job gain. Private-sector job gains totaled 230,000 in March, after a revised gain of 240,000 private-sector jobs in February. The two-month rise was the largest in five years.
Job gains in the private sector are especially critical at this time because of ongoing losses in state and local government employment. Severe budget pressures upon states, counties and cities across the nation led to a net loss of another 14,000 jobs in March.
Local governments have shed more than a quarter million jobs during the past 12 months, with more than half of the jobs cut in public schools, according to cnnmoney.com. Local government employment is down by 416,000 positions since peaking in September 2008.
Perhaps the best news in the employment report was another down-tick in the nation's unemployment (jobless) rate to a two-year low. March's jobless rate of 8.8 percent, down from February's 8.9 percent rate, has now fallen a full 1 percent since November. The decline was the largest four-month drop since 1984, a period of 27 years!
The sharp decline in the nation's unemployment rate, despite less than blockbuster job gains in recent months, again illustrates the difference between the two major employment surveys. The "establishment" survey of roughly 400,000 medium and large-size businesses (the source of the 216,000 net job gain in March) reported an average monthly gain of 159,000 net new jobs during 2011's first quarter.
The "household" survey of roughly 60,000 households (the source of the 8.8 percent jobless rate) reported a gain of 291,000 jobs in March and an average monthly gain of 377,000 jobs during the first quarter — more than twice that found in the establishment survey!
As noted before, the household survey can, at times, be a better measure of what is happening in the new business start-up and current small-business sector than is the establishment survey. Over time, the two surveys do tell similar stories.
It's no secret that the 1 percent decline in the nation's unemployment rate over the past four months has been 1) a surprise to forecasting economists; 2) a delight to a Democratic administration and Senate already focused on the 2012 election cycle; and 3) a bit disappointing from a political perspective for Republicans focused on the same.
As noted ad nauseam, the unemployment rate could still move slightly higher in coming months as potentially hundreds of thousands of people, hearing more stories of job availability, re-enter the labor force in search of the job. Unless and until they find a job, they are now counted as unemployed.
The nation's goods-producing sector added 31,000 net new jobs during March, led by another 17,000 jobs in manufacturing. The mining and logging sector added 15,000 jobs, while construction lost another 1,000 jobs.
The nation's much larger private-sector service-providing industries added 199,000 net new jobs in March, the largest monthly gain since May 2010. Professional and business services added a healthy 78,000 net new jobs, while the education and health services sector added 45,000 jobs, with the majority in health care.
Wholesale and retail trade added 32,000 jobs, while financial activities added 6,000 positions. Leisure and hospitality added 37,000 net new jobs, while "other" services added 5,000 jobs, and information lost 4,000 jobs.
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