South By North Strategies, Ltd.

A Bit Of Labor Market Momentum

CHAPEL HILL (April 1, 2011) – The national economy netted 216,000 payroll positions in March. This marked the sixth consecutive month of job growth. While strong by recent standards, the March level of payroll growth failed to alter the basic employment picture. In fact, the unemployment rate and associated measures of joblessness and labor utilization changed little last month. These findings come from the latest national employment report.

“Net job growth of 216,000 positions in March represents a real step forward,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the past two months, payroll employment has increased at a level not seen in several years. Moreover, the growth is insufficient to undo the damage caused by the 2007-09 recession.”

In March, the nation’s employers added 216,000 more payroll positions than they cut. Gains occurred entirely within the private sector (+230,000), while government payrolls fell by 14,000 positions due to payroll reductions by local governments. In recent months, payroll cuts by local governments have held back job growth. Additionally, the payroll employment numbers for January and February were revised upwards. With the revisions, the economy netted 262,000 jobs over those two months rather than the 255,000 positions previously reported.

Private-sector gains in March occurred primarily in professional and business services (+78,000), education and health services (+45,000), leisure and hospitality services (+37,000), and retail trade (+17,700). With the exception of the construction and information industries, all other private-sector industries grew in March.

“The March employment report suggests that a level of job growth has taken hold in the United States,” noted Quinterno. “Over the past two months, net job growth has averaged 205,000 positions, but the pace is insufficient to replace the jobs lost during the recession.”

The inability of the current pace of job growth to alter employment conditions was reflected in the March household survey. Last month, 13.5 million Americans (8.8 percent of the labor force) were jobless and seeking work. While the unemployment rate and number of unemployed individuals fell over the past year, so did the size of the labor force. In March, the share of the population participating in the labor force (64.2 percent) was not only lower than one year ago, but also was at a level last seen in the early 1980s.

Last month, proportionally more adult male workers were unemployed than female ones (8.6 percent vs. 7.7 percent). Similarly, unemployment rates were higher among Black (15.5 percent) and Hispanic workers (11.3 percent) than among White ones (7.9 percent). The unemployment rate among teenagers was 24.5 percent. Between February and March, unemployment rates for most every major demographic group were little changed.

Furthermore, nine percent of all veterans were unemployed in March. The unemployment rate among recent veterans (served after September 2001) was 10.9 percent.

“Despite the growth in payroll employment, jobs remained difficult to find in March,” added Quinterno. “Last month, the underemployment rate equaled 15.7 percent. Among unemployed workers, 45.5 percent had been jobless for at least six months with the average spell of unemployment lasting for 39 weeks.”

“The March employment report suggests that labor market conditions have stabilized and that the private sector is adding jobs, although some of that growth is being canceled out by job losses in the public sector,” observed Quinterno. “Unfortunately, the recent improved level of growth simply is not good enough to reverse the damage caused by the recession. If the March rate of job growth were maintained, holding all else equal, it still would take several years to replace the more than seven million jobs lost since December 2007.”

NC Unemployment Claims: Week of 3/12

For the benefit week ending on March 12th, 14,411 North Carolinians filed initial claims for state unemployment insurance benefits, and 125,606 individuals applied for state-funded continuing benefits. Compared to the prior week, there were more initial and fewer continuing claims. These figures come from data released by the U.S. Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of  13,058 initial claims were filed over the previous four weeks, along with an average of 126,768 continuing claims. Compared to the previous four-week period, there were more initial and fewer continuing claims.

One year ago, the four-week average for initial claims stood at 17,189 and the four-week average of continuing claims equaled 202,207.

While the number of claims has dropped over the past year so has covered employment. Last week, covered employment totaled 3.7 million, down from 3.9 million a year ago.

The graph (right) shows the changes in unemployment insurance claims (as a share of covered employment) in North Carolina since the recession’s start in December 2007.

Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably. Yet continuing claims remain at an elevated level, which suggests that unemployed individuals are finding it difficult to find new positions.

Around The Dial – 3/31/11

Economic policy reports, blog postings, and media stories of interest:

• Robert Reich isn’t optimistic about the economy’s prospects.
• Neil Barofsky points out where “the bailout went wrong.”
• NC Policy Watch discusses charter schools.
• Fed Watch doesn’t think the Fed should act like an academic department.
• Felix Salmon thinks Alan Greenspan’s credibility is gone.
• Free Exchange shakes its head at strange ideas.

A Second Housing Slump?

The PBS News Hour asks if the United States is facing a second housing slump. The segment features the comments of Robert Shiller, one of the creators of the S&P/Case-Shiller Home Price Indices.

Watch the full episode. See more PBS NewsHour.

So, That’s Where The Tax Dollars Go

Third Way, a centrist policy organization in Washington, D.C., recently prepared an online calculator that shows where federal income tax dollars go.  Click on the image below to access the calculator and generate a “tax receipt.”