White House's Alan Krueger on March jobs numbers
People meet potential employers at a job fair held at the Jewish Community Center (JCC), on March 21, 2012 in New York City.
Stacey Vanek Smith: 120,000 people were hired in the U.S. last month, according to the Labor Department. That was roughly half of what economists had expected, and a significant slowdown compared to the last few months. It puts the U.S. unemployment rate at 8.2 percent.
Jobs are often seen as the most important gauge of the economic recovery. In a speech today, President Obama said we have to think long-term.
Barack Obama: It's clear to every American there will still be ups and downs along the way and we got more work to do.
Alan Krueger heads the White House Council of Economic Advisers and he joins me now from the White House. Good morning Mr. Kreuger.
Alan Krueger: Good morning.
Vanek Smith: Mr. Krueger, what happened in March? Why did these numbers come in so much lower than expected?
Krueger: Every month, I say it's important to look at the new numbers that are coming in in the context of other data that we see. And I think when you step back, we see a picture of the economy improving, but there's still a long way to go. Over the last quarter, we've had the strongest job growth that we've had since the first quarter of 2006. The numbers move up and down because they get revised month-to-month; it's useful to help smooth them out. The unemployment rate has been coming down since the summer of last year -- it's down from 9.1 to 8.2 percent. So the trajectory for the economy continues to be good, but there's a long way to go until the economy's restored to full health.
Vanek Smith: One thing we also saw in March was that the labor force participation rate also dropped, meaning there are fewer people out looking for work. Is that concerning the White House?
Krueger: The household survey is a sample of about 55,000 households, but even with a sample size that large, a movement in labor force participation of a tenth of a percentage point doesn't register as being statistically significant. In other words, it could just be a movement due to chance, variability with the sample. So I look at a longer time period. If you look over the last seven, eight months, when the unemployment rate came down from 9.1 percent last summer to 8.2 percent in March, the unemployment participation rate has held pretty much steady, which indicates that the unemployment rate has been dropping over this period because of stronger job growth.
Vanek Smith: One final question, Mr. Krueger: One of the strongest sectors that we saw in March was manufacturing. I know that's been a real focus of the White House's. Are there other sectors that the administration is thinking of focusing on going forward?
Krueger: Well manufacturing has been a bright spot. The number of jobs created in the manufacturing sector over the last 25 months has been the most since the middle of the 1990s. The auto industry in particular has been strong. We would like to see a turnaround in construction. One of the headwinds that the economy has faced -- we overbuilt residential homes, and ordinarily in a recovery, home construction helps to fuel the recovery. That's one of the reasons why the administration has taken a number of efforts to help stabilize the housing market, strengthen the housing market. Also it's one of the reasons why the president has championed an increase in investment in infrastructure. The unemployment rate now for construction workers is 17 percent. I think we could help the economy in the short run by putting more construction workers back to work by improving our roads and highways and our ports, and also improve the competitiveness of the U.S. economy in the long run by having a better infrastructure by pursuing the president's proposals to start an infrastructure bank, to make smarter investments in infrastructure, by raising our investments in infrastructure here in the U.S.
Vanek Smith: Alan Krueger is the head of the White House Council of Economic Advisers. Mr. Krueger, thank you.
Krueger: Thank you.