The one disappointment in today’s jobs number was actually good news.
In March the U.S. economy added 162,000 jobs, according to the U.S. Department of Labor.
The number would have been even higher except that the government hired only 48,000 temporary census workers. That was less than economists had expected and explains most of the difference between the 162,000 actual jobs added and the consensus among economists surveyed by Bloomberg of 184,000 jobs.
The shortfall in census hiring is actually good news.
It means that the March increase in jobs isn’t merely a reflection of government hiring. Government hiring for census work is only a temporary boost to the employment numbers. The big bulge in census hiring will be over by June and the government will start shedding jobs at that point.
Which is why it was so heartening to see private companies actually accounting for the vast majority of the new hires. Private payrolls increased by 123,000 in March. That’s the biggest increase since May 2007.
Digging a little deeper, the data show continued strength in the manufacturing with the sector adding jobs for the third straight month and indicated the beginning of a turnaround in construction hiring. That sector added 15,000 jobs in March. That’s the first increase in construction jobs since June 2007.
Of course, the economy isn’t out of the woods yet. As I mentioned, the federal government will start letting census workers go in June and state governments are still cutting jobs. Despite the job additions in March official unemployment remained stuck at 9.7% as an improving economy drew some discouraged workers back into the job hunt.
The full unemployment number, which includes discouraged workers and workers with part-time jobs who would like full-time work, actually climbed in to 16.9% in March from 16.8% in February. The number of people who have been out of work for 27 weeks or longer climbed to a record 44.1% of all the unemployed.
I think this data keeps the U.S. economic recovery on track. We’re still in the early stages of a recovery. (For what to invest in during this part of the economic cycle see my post https://jubakpicks.com/2010/01/26/for-after-the-correction-think-industrial-stocks-market-history-says-this-is-their-time/ ) But I think this data should convince more people that the U.S. economic recovery is real.
The big question for the second half of 2010, however, remains: Exactly how strong will this recovery be? Are we looking at 2% growth in the second half or 3.5%? It makes a huge difference to corporate earnings and stock prices—not to mention the lives of real people hoping that the end of near 10% unemployment is close at hand.
(The party’s almost over, sigh. I’m filing this post from the beach, but I’m scheduled to fly back to reality tomorrow. JubakPicks.com will go back to its normal schedule on Monday April 5.)
Somewhere in the distance, a Federal Reserve board member is whispering sweet nothings into Bernanke’s ear, “Now that jobs are coming back, can we raise the rates?”
$15 billion to do the census. About $50 per American. Nice fiscal restraint.
cpressley
I remember tracking the market when the dividend tax was cut. There was a large number of people a the time predicting that the market would take and investors would flock to diividend paying stocks. Some also predicted that dividends would rise as companies competed for this capital.
It just didn’t make any sense to me at the time, because it simply didn’t amount to that much money being saved by tax reduction compared to, say, changing one’s investments. My admittedly crude analysis of the two years that followed enactment I believe showed no effect at best. I used the Dow as a rich dividend source of stocks, the S&P as a moderately good dividend source, and the Nasdaq as a poor dividend source. Those two years did show market recovery, but with the Dow and the S&P not showing the expected pop, and the Nasdaq getting all the attention.
What it comes down to in my mind is that the answer to your question is – probably doesn’t matter. Taxes at this level are not the motivator that the popular mythology makes it out to be.
CT thanks for that link. I can explain North Carolina, which is way down cause textiles have been closing and moving for years. One bright point is new manufacturing companies love our state because all the infrastructure is already in place.
Jim,
Not that I haven’t appreciated or enjoyed your posts over this last week but how is continuing to post once or twice a day a vacation for you? Whatever happened to leave the work at work and go play on vacation! You deserve it as much as the next guy.
Still, it will be good to have you back.
I believe the birth death model created about 80,000 of those jobs
Here’s a start:
http://tinyurl.com/nxmtye
The deepest blue areas are the saddest (of course).
Does anyone know how to get the break-down of the population of unemployed? Just curious to see if there is a break down to geographic area, age, and etc… It would interesting to analyze this.
Jim – please, go and enjoy your vacation and stop troubling yourself with speculating about that 2-3.5% differential. [Otherwise, the merciless amongst us will have to chide you for ‘predictions’ about first half performance when the first half is 2/3 finished…the headline might as easily have read, “Crash unlikely in next two months…”]
People always have something to worry about. In 2009 they worried the first half of 2010. In the fist half 2010 they worry about the second half of 2010. In the second half of 2010 they will worry about 2011 … goes on and on … In 2012 they may worry about the next recession in 2013. So if you wait until no worries you will never get a chance to buy stocks.
There is no worry free investment
An off topic set of questions for all. Given the likely expiration of the Bush tax cuts and the increased tax on dividends for those earning over $200k, is the Jubak investment strategy of targeting high dividend paying stocks now less desirable? Do we expect a sell off at the end of 2010? If so, still a good strategy?
I hope you enjoyed your vacation.