March U.S. jobs numbers a disappointment

Jeremy Hobson Apr 6, 2012

Jeremy Hobson: Wall Street is closed today for the holiday, but the government is open, and the Labor Department just reported that only 120,000 jobs were added last month. That’s slightly more than half of what economists were expecting. The unemployment did fall to 8.2 percent.

Chris Low is chief economist with FTN Financial. He’s with us live as always from New York. Good morning.

Chris Low: Good morning.

Hobson: So Chris, when I saw this, it reminded me of that scene in “National Lampoon’s Christmas Vacation” where Clark Griswold think he’s going to get a big cash bonus from his boss, and instead he gets a one-year membership to the Jelly of the Month Club.

Low: That’s pretty much what it felt like. This is just a lousy report. Not only were the job gains weak — 120,000 jobs added is exactly half as many as we saw in February. And even the silver lining in the report, which was a drop in the unemployment rate, it was tarnished by the fact that it wasn’t because of job growth — it was because so many people dropped out of the labor force, which is a theme we’ve been talking about for more than a year.

Hobson: And what’s the reason for the bad numbers this month?

Low: Well, you know, one thing we’re looking at is the weather. We had a remarkably warm, dry winter, and what that does is it allows, in a lot of industries, companies to keep going when they normally would shut down. That’s especially true in construction, some retail, trade and transportation. And so what happens is, those payrolls swelled in January and February, and then shrank in March. And as a result, you really have to look at the three months on average together, which, well, the average is 211,000 — which isn’t bad, it’s just not nearly as strong as we thought looking at the January, February numbers alone.

Hobson: And if it’s not as strong as we thought, does that change the calculus in Washington, particularly when it comes to the Fed and whether they’re going to put additional stimulus into the economy?

Low: Oh absolutely. One of the most exciting stories we’ve been watching this week is this debate that seems to be raging within the Fed. There’s a group of vocal regional Fed presidents who have been arguing against further stimulus; they say the economy’s getting stronger and all you have to do is look at the jobs numbers. Ben Bernanke gave an unusually frank speech where he said not so fast, I don’t believe employment really has improved as much as, well, January and February showed. And boy, does Bernanke look smart today.

Hobson: Chris Low, chief economist with FTN Financial. Thanks as always.

Low: Thank you.

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