If the job market seemed soft a month ago, these days it appears softer still.
Late last week the Labor Department reported the unemployment rate rose from 4.8 to 5.1 percent in March, and nonfarm payroll employment was down 80,000 jobs. According to a Bureau of Labor Statistics release:
In March, employment continued to fall in construction, manufacturing, and employment services, while health care, food services, and mining added jobs.
The Wall Street Journal notes the job losses are the largest in five years and the third consecutive monthly decline:
Also, revised data showed that employers cut 76,000 jobs in both January and February, more than previously thought. Together, the numbers offer the most persuasive evidence yet that the economy has slipped into a recession.
Even former Federal Reserve Chairman Alan Greenspan says the recession has arrived.
Is there any good news?
A Different Perspective
A report by American Public Media’s Marketplace offers hope. Economist Hugh Johnson says it’s important to ask how long and deep the slowdown will be. He explains:
There’s a reasonable case that could be made that this is not going to be long and it’s not going to be severe. … We’ve gotten some messages from the financial markets recently that give us the reason to believe that conclusion, so I don’t think all is lost.
Ken Goldstein, an economist at the Conference Board, says consumers have concerns that hold true whether there are job losses or gains. In the Marketplace piece, he says:
Consumers are looking at what’s coming in and nervous a little bit about that, looking about what we have to pay, and nervous about how much more there’s going to be. So that household budgets are being squeezed as we speak.
I e-mailed Goldstein for more clarification on this point, and he responds:
The consumer worry about slipping purchasing power is influencing their attitudes and their spending patterns. This concern is a dual issue. They worry about possible pay cuts, losing raises or bonuses. The separate concern is about the rising cost of energy, groceries, taxes, and everything else consumers pay for.
The Marketplace report keeps things in perspective. It reminds us of other economic factors at play, such as the rising costs of goods and services. And ultimately, it reminds us that no one can say for sure what this fiscal season will bring. At the beginning of the Marketplace piece, host Kai Ryssdal says:
I don’t know if any economists would actually admit this if you asked them, but they do a certain element of winging it when they’re trying to figure out what’s going on. Take today’s March unemployment figures. Objectively, 80,000 jobs lost isn’t a huge number. But when it’s the biggest monthly drop in five years, as it was, and it’s the third consecutive month of declines, as it was, then it’s not so good.
These may not be the best financial times. But fretting over how gloomy the picture could become is only a waste of time.
- More jobs lost. When will this end? (Marketplace)
- Bureau of Labor Statistics release on the employment situation
- U.S. Suffers Biggest Jobs Drop In 5 Years as Downturn Spreads (The Wall Street Journal)