The March jobs report was underwhelming, to say the least. While unemployment fell to 7.6 percent from 7.7 percent, the economy only gained 88,000 jobs, and most of the unemployment reduction was due to people dropping out of the workforce. Like we always do at this time, let’s break it down, chart-style.
Unemployment and jobs gained
The 88,000 jobs gained figure was a huge disappointment compared with recent months, as this great interactive from our colleagues in graphics makes clear:
Then again, both January and February's reports were revised upward, with January going from 119,000 jobs gained to 148,000 jobs gained, and February going from 236,000 gained to 268,000 gained:
The public sector didn't do too well in March, either, losing 7,000 jobs in the first month the sequester was in effect. But February's numbers were more positive, with 14,000 public jobs added, according to the revised numbers, the first gain since September:
Labor force participation
This is where it gets ugly. Labor force participation, already down considerably since the recession, fell further to 63.3 percent, the lowest level since 1979:
As we explain every month, the Bureau of Labor Statistics releases six unemployment measures. There’s U3, the number that shows up in all the news articles, which counts people who don’t have jobs but have looked for one in the past four weeks. But there are also U1, U2, U4, U5 and U6. U1 and U2 numbers are usually lower than U3, and they measure the percentage of people who have been unemployed for 15 weeks or longer and the percentage who have lost jobs or done temporary work during the month being measured, respectively.
The figures for U4, U5 and U6 are usually higher than for U3. Each of these categories includes everyone in all the lower categories: All people in U3 are in U4; all people in U4 are in U5; and all people in U5 are in U6. U4 adds people who have stopped looking for work because they’ve concluded that none is available. U5 adds people who would like to work but for whatever reason have not looked for work recently. U6 adds the underemployed, or part-time workers who want to be working full-time but cannot for whatever reason.
All six measures fell this past month, and the most inclusive metrics (U5 and U6) dropped the most, which suggests the fall in labor force participation may be due to demographics more than to discouraged people no longer looking for work:
Last but not least, wages continued to grow at a meager pace, with the year-over-year rate falling to 1.8 percent from 2.1 percent in February. That's well below the Federal Reserve's inflation target, yet another sign that wages aren't increasing much at all in real terms: