Jobs Report Far Below ExpectationsApril 06, 2012 | Comments : 10 Recommended this article: (0)
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In March, the economy produced a total of just 120,000 jobs, half the 240,000 produced in February and well below consensus expectations for a 200,000 gain. On the private side, 121,000 jobs were created, down from 233,000 in February and well below the 215,000 consensus.
Despite the sharp slowdown in job growth, the unemployment rate fell to 8.2% from 8.3%, and is down from 8.9% a year ago. The drop is due to yet another decline in the civilian participation rate to 63.8% from 63.9% in February and 64.2% a year ago. The unemployment rate is determined from a separate survey of households. That survey showed that the number of jobs actually dropped by 31,000, but there was also a drop of 133,000 in the number of unemployed as fewer people were in the workforce (despite a rise of 169,000 in the Civilian non-Institutional population.
While this is a deeply disappointing report, there are a few silver linings. The drop in the number of the unemployed was concentrated among the longer term unemployed, and the median duration of unemployment dropped to 19.9 weeks from 20.3 weeks in February, and 21.6 weeks a year ago. It is still extremely high on a historical basis. Prior to the Great Recession the highest it ever got to was 12.3 weeks. The number of people working part time for economic reasons (i.e. they want to work full time but part time is all they could get) fell by 365,000 on the month. That helped push the U-6, or underemployment rate down to 14.5% from 14.9% last month and 15.7% a year ago.
We also saw the unemployment rate fall for almost all major demographic groups. The exception was Teens, where the rate rose to 25.0% from 23.8%. However, the unemployment rate was down for Men and Women, as well as for Blacks, Hispanics and Whites. If you look at the rates by level of education, the declines were much sharper for the less educated parts of the workforce, with the rates for drop outs falling to 12.6% from 12.9% last month and 13.8% a year ago. The rate for HS graduates fell to 8.0% from 8.3% last month and 9.5% a year ago. However for those will some college, or an associates degree the rate rose to 7.5% from 7.3% and is actually higher than the 7.4% rate a year ago. For those with a four year degree or more, the rate was unchanged from last month at 4.2%, and down from 4.4% a year ago.
All in all, this was a very disappointing report, and the market will probably open sharply lower on Monday.
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