Private sector responsible for March job numbers
JEREMY HOBSON: Now let’s get to this morning’s employment report from the Labor Department. It says the U.S. economy added 216,000 jobs in March. That was more than most economists were expecting. All of the job gains were in the private sector. In fact, government jobs dropped by 15,000. The unemployment rate has dropped from 8.9 percent to 8.8 percent.
For more on all this, let’s bring in our regular Friday guest, Chris Low, chief economist at FTN Financial. He’s with us live from New York. Hi Chris.
CHRIS LOW: Good morning.
HOBSON: So, what’s your reaction to this report?
LOW: Well, look, on balanced it’s a terrific report. There’s a lot of like here. For the first time since the recession, we had private job growth of more than 200,000 two months in a row. The unemployment rate has fallen four times in a row, something no economist would’ve though possible at the end of last year. And well, just in general, it looks much better — the employment situation — than it did a year ago. But unfortunately, there’s also some real problems in here as well. There are industries like construction and state and local government that are not participating in the gains. And the duration of unemployment remains very very high.
HOBSON: And Chris, what does all of this mean as policy makers and law makers in Washington decide what to do when it comes to economic stimulus going forward?
LOW: Well, that’s where it’s going to get really difficult. The Federal Reserve, which makes monetary policy has only blunt tools at its disposal. So as the unemployment rate comes down, at some point they’re going to have to raise interest rates. And actually, today, the bond market’s already anticipating that those rates have gone up. And meanwhile, Congress you know, at some point they have to take fiscal stimulus away as well. But that’s going to be tough when you have whole industries not participating in the recovery.
HOBSON: Chris Low, chief economist at FTN Financial, thanks so much.
LOW: You’re welcome.
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