The data is coming in, and it appears it was the weather after all. The jobs report showed a gain of 192,000 (slightly below expectations but still quite healthy), the unemployment rate remained steady at 6.7 percent (which is actually better than it looks), and private employment hit a new all-time high—all very good signs for the future.
Let’s look at some of the details. Even as the number of jobs increased, the average hours worked per week ticked up to a four-month high, meaning the demand for labor increased by even more than the number of jobs. This was on top of the upward revisions for February, which means the damage there wasn’t nearly as bad as feared and suggests this month’s figures are sustainable. The scope of the results was also encouraging, with 58 percent of sectors reporting job growth.
People are responding to the job growth trend. While the unemployment rate remained the same, it was because an even stronger report of 476,000 new jobs in the household survey was overmatched by 503,000 new people now looking for work. Think about it: half a million people moving back into the labor force, with no effect on the unemployment rate. This also drove the participation rate up, suggesting even that depressing metric was starting to feel the progress.
It wasn’t all good, though. The underemployment rate rose slightly, driven by the move back to the labor force by many who had been out. Wage rates were flat, pushing the annual increase down a bit. And government employment continues to decline, even as private employment increases.
We’re not out of the winter yet, as overall employment remains too low and wage growth needs to be higher. At the same time, however, the trends are clearly in the right direction, and the fact that people are now moving back into the workforce shows that the psychology has shifted, which will have positive economic effects across the board.
For the first time in years, it looks like we may be set for accelerating growth as we start to move back to a really normal economy. Risks remain, of course. But unlike in previous springs, the average worker now seems to think things are really getting better, and is proving it by returning to the workforce. This is a big change, and a very welcome one.