March payrolls rise 162,000 on private hiring

U.S. non-farm payrolls, a key measure of the economy's health, rose in March for only the third time since recession struck in late 2007 as the private sector stepped up hiring at the fastest pace in almost 3 years.

Employers added 162,000 jobs last month, the Labor Department said on Friday, leaving the unemployment rate steady at 9.7 percent for the third straight month. The payrolls increase was the largest since March 2007, and also reflected temporary hiring for the census.

The economic cheerleaders are shaking their pom-poms hard over this number. The liquidity driven stock market supports nearly any positive economic outlook and makes cheerleading easy. A rising stock market equals an economic recovery comes straight from the how to manage a depression handbook.

A look inside the numbers, something a few of us still like to do, reveals that the labor forces is expanding faster than job creation. The differential rate of expansion is reflected by the jobs creation histogram (JCH). JCH > 0 indicates marginal job creation. That is, jobs are being created faster (or contracting more slowly) than the labor force is expanding (or contracting). When JCH > 0, it reflects a positive environment for job seekers. JCH < 0, however, indicates marginal job destruction. That is, the labor force expanding (or contracting more slowly) faster than job creation (or destruction). When JCH < 0, it reflect a negative or tough environment for job seekers.

The huge downward spike in the JCH in 2009 illustrates the extent of the damage sustained within the labor market during the last hemorrhage phase. Clearly, the damage was much greater than the 2000-2003 phase. While the employment picture has improved from the 2009 lows, it still remains far from a picture of health. Labor force continues to expand (or contract more slowly) than job creation (or destruction). As a result, the JCH remains below zero. This recovery, even more dramatic than the previous, can only be classified as a jobless recovery and tough environment for job seekers.

Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.


Source: finance.yahoo.com