March jobs report: Just how bad is it?

The economy added 120,000 jobs in March, according to the Bureau of Labor Statistics, and everyone’s disappointed. Analysts were expecting a much higher number, and the last three months have all seen growth above 200,000 jobs per month. So just how bad is the news?

This unemployment line isn’t getting any shorter. (Rick Bowmer/AP) First, there’s the most important number: At the moment, 12.7 million Americans are still looking for work and can’t find it. It will take a long time to put a serious dent in that figure. It would’ve taken between seven and twelve years to get back to full employment even if we were adding jobs at a 200,000-a-month pace, the number analysts had expected for March. Adding just 120,000 jobs makes the task even harder — that’s barely enough to keep up with the monthly growth in population.

One big question, however, is whether the BLS’s estimates for March are actually correct. As Ryan Avent points out, because there’s such a huge margin of error in these reports, there’s a 90 percent chance that the U.S. economy added somewhere between 20,000 and 220,000 jobs last month. The real number could be better. Or much worse. Over the past year, the jobs figures have gone up quite a bit every time they get revised in later months. Last August, for instance, everyone initially thought the economy added zero jobs. That number was later revised to 100,000. So will that hold true for March? Or is the economy really souring?

Meanwhile, there’s been a lot of talk lately about whether the freakishly warm winter artificially boosted the economy in January and February by helping the construction industry get an early start. This seems to be borne out somewhat in the numbers: Construction jobs actually dropped by 7,000 in March after growing the previous two months. That underscores, yet again, the fact that the housing market is still quite soft.

Two other things in the report. First, austerity no longer seems to be a drag on U.S. job creation. Government employment fell by only 1,000 jobs this time around — mainly because of the shrinkage in the U.S. Postal Service. Meanwhile, the income figures provided very slight good news: Average hourly pay rose by 5 cents in the past month.

And if anyone is eager for encouraging signs, it’s worth pointing out that the very broadest measure of unemployment actually improved this month. This is the U-6 metric, which tallies up all unemployed persons, plus people marginally attached to the labor force, plus people employed part-time for economic reasons. Jim Pethokoukis likes to call this “perhaps the truest measure of the labor market’s health.” And U-6 dropped from 14.9 percent in February to 14.5 percent in March. Anyone trying to dig around for optimistic signs should start there.

Still, it’s a weak report all around. And we’ll know in a few months if March was actually as tepid as everyone thinks. In theory, the real significance of this report should be whether it convinces Ben Bernanke and the Federal Reserve that a little more monetary stimulus is needed. But how likely is that? The unemployment rate is roughly in line with what the Federal Open Market Committee has been expecting. And if the Fed’s content with the current state of affairs, then more help may not be on the way after all.