March Unemployment Report: Jobs Grow, But Fall Short of Projections

There's good news and bad news in unemployment numbers released Friday.

We'll start with the good news. The Bureau of Labor Statistics says employers added 162,000 jobs in March, the biggest increase in three years. The unemployment rate, meanwhile, stuck at 9.7 percent, is where it's been for the last three months (the numbers don't always move in the same direction—both because they come from different data sets and because people who have stopped looking for work are hunting for jobs once more). And February's numbers, which originally showed 36,000 lost jobs, have been revised upward to a loss of only 14,000.

Now the bad news: the numbers aren't as positive as had been expected, and they're likely distorted by temporary Census hires. In a poll of economists by Dow Jones Newswires prior to the announcement, the consensus view was that jobs would rise by a more robust 200,000, and other projects hovered in the same area. The actual growth fell nearly 20 percent short of that target. And of the 162,000 jobs that were created, nearly 50,000 were temporary positions with the Census, which help to get some workers back on payrolls but won't last longer than a few months.

Despite the shortfall, many analysts are remaining upbeat, saying that the continued growth is a sign that the economy has indeed turned a corner toward recovery. Paul Krugman writes that "the patient is in stable condition." Writing at Forbes, Sy Harding says the numbers shouldn't be seen as falling short of expectations. The Census was expected to add around 100,000 jobs in March but actually added only 50,000. Those jobs will presumably show up later (the Census is expected to employ as many as 600,000 temporary workers over the course of the year), and they more than account for the deficit between projections and results. The economics blog Calculated Risk has a useful graphic of job losses over the course of the recession—it's a scary curve compared to past downturns, but the recent trend is more encouraging.

The underemployment rate, a less heralded number that some argue is a more representative sample, registered a (very slight) rise in March, moving to 16.9 percent, up 0.1 percent. The statistic includes everyone in the 9.7 percent unemployment rate, plus workers who either have quit looking for work but would like a job and those who are working part-time because they can't find a full-time position. The left-leaning Economic Policy Institute writes that regardless of the numbers today, the prospects for the future are still sobering: "Consistent job growth has yet to arrive and the unemployment rate will probably not peak until the second half of this year. In short, this recovery is currently 'jobless' and has been for quite some time."

Another group that's disappointed this morning: the Obama administration. Treasury Secretary Tim Geithner sounded an optimistic note yesterday, but lower-than-expected growth is a black eye for the government. A CNN poll released yesterday shows that voters now give Republicans higher marks for handling the economy.

Markets are closed for Good Friday, so it's not clear how investors will respond to the employment news.