Jobs Report: First Reaction

April 5th, 2013 at 9:01 am

Payrolls were up only 88,000 last month, well below expectations, and while the unemployment rate ticked down to 7.6%, the decline in the jobless rate was due not to job gains, but to people leaving the labor market.  In fact, the share of the population in the workforce—working or looking for work—fell to 63.3%, the lowest level in decades.

In other words, a notably weak jobs report.  As usual, we want to be careful not to over-interpret one month’s worth of pretty volatile data.  Still, over the first quarter of the year—thus averaging out some of the statistical noise in the report—payrolls are up 168,000 per month, compared to 209,000 per month in the fourth quarter of 2012.

I’ll have more details later, but for now, I’ve gotta say that this deceleration in job growth and deterioration in labor force participation looks a lot like what you’d expect if you hit a still weak recovery with the repeal of the 2% payroll tax break and the sequester (which, as I said yesterday, is probably only a minor factor in these numbers, but will grow as the year progresses).

There’s a lot of moving parts in our economy, and the signal-to-noise ratio is never as high as you’d like in these monthly reports.  But this looks to me like a confirmation of the basic truth that policy matters, especially at a time like this.  And from the perspective of a labor market that has yet to reliably show consistent signs of solid gains, we’re simply not making the right policy choices.

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One comment in reply to "Jobs Report: First Reaction"

  1. Daniel M. Roller says:

    April 5, 2014
    Mr. Bernstein, Sir (or anyone); At age 61 my SS account statement says I have paid more than $160k into MY ACCOUNT over 43 years (INTEREST FREE). The government has spent my money to fund its own and PRIVATE interests–including bailing out banks, paying ridiculous CEO salaries, and funding wars. Why should not ALL entities (GE; Mitt Romney’s off shore accounts; Wall Street, BANKS) be held accountable for the SS deficit? Ergo, how does the President rationalize reducing MY account for its privilege of using my money–interest free? (And never mind the modest cost of living…BENEFIT?) I see only two fair solutions: a) have the OMB determine what FLAT tax rate should be paid by every single entity in the US to make appropriate restitution to the SS (& Medicare) TRUST funds–with no exceptions for ANYONE OR THING, or, b) refund every dime owed to every account, with applied interest for each and every year the money was USED (requiring an even greater tax rate). SS has not been cared for and protected as required by law–if the funds had been separate, inviolate, and allowed to accrue interest we would not be here today. To wit: the US is proposing to default on its obligations–to “change the deal” after it was struck long ago. To use my money for other than its intended purpose–and then to “fine” ME for THEIR trouble is theft, and it is wrong. If my thinking is on this matter is incorrect or not fair, please straighten me out. Thank-you–dr.