March Unemployment Falls to 8.2 Percent as 120,000 Jobs Added

The Labor Department released its jobs report for March

April 6, 2012, 9:20 AM

April 6, 2012 — -- The country's employers added 120,000 jobs in March as the unemployment rate fell to 8.2 percent, the Labor Department reported Friday.

The stock markets in the U.S. are closed today for the Good Friday holiday, so investors won't get a chance to act on the jobs news until Monday. Stock futures, which indicate how the market will react when trading resumes, showed the Dow Jones industrial average down 120 points.

The job additions may disappoint some people. Economists expected 210,000 jobs to be added in March and the unemployment rate to stay at 8.3 percent as more discouraged workers reentered the job market.

Stephen Bronars, senior economist with Welch Consulting, called the jobs report "disappointing," but cautioned against interpreting only one month of data. He said he is concerned by longer-term trends.

"The labor force is not growing in size and there has been no growth in employment for workers with a high school diploma or less in the past 12 months," he said. "The jobs we have created in the past year are just enough for population growth, not enough to pull us out of the recession."

Meanwhile, the employment to population ratio has remained unchanged in the past year.

February's jobs added was revised up to 275,000 from 227,000 jobs, which was slightly more than expected and capped the best six-month streak for job additions since the depths of the financial crisis in 2008.

January was revised lower to 275,000 from 284,000 jobs added.

Bronars said the figures from January and February were likely inflated because of the mild winter.

"So the smaller change this month is partially the good weather catching up to us," he said.

The report comes on the heels of two private surveys showing the economy is getting better. CareerBuilder's quarterly report says more employers are planning to add to their workforce. "Thirty percent of employers we spoke to say they plan to hire full-time positions in the second quarter," said Michael Erwin of CareerBuilder. This compares with 24 percent in the last survey three months ago. "The numbers are going back to where they were pre-recession so that's good news employers are back to the table, they're looking to hire."

Polling by Gallup found job market conditions in March reached their best level since August 2008. Gallup's Job Creation Index now at +18, up from +14 in February.

Jobless claims are now down to their lowest level in four years, after falling to 357,000 in the final week of March, the Labor Department reported Thursday in advance of the monthly jobs report. For the week ending March 31, the number of people filing for benefits dropped by 6,000. The previous week, claims stood at 363,000.The four-week average also went down, falling by 4,250 to 361,750.

While admitting that a decline in unemployment insurance claims is mildly good news, its not the full story according to Bronars. The jobless claims figure is, of course, one of the most widely cited and yet misunderstood numbers. And the devil is in the details. As Bronars explained, in order to file new claim you had to be working, and then get laid off.

"The biggest problem we have is not high layoffs, but low rates of hiring. There were fewer layoffs in 2011 than in any year in more than a decade. Firms had already cut their workforces in the recession and layoffs fell in the past 2 years," Bronars told

"Through the first quarter of the year we have seen 5.1 million people file for unemployment insurance benefits for the first time. We are on pace to have over 19 million first-time unemployment claims in 2012," according to Bronars.

And the other issue on the job front is that people finishing school can't find full-time jobs and the the long-term unemployed are struggling to find work.

In the past year employment for college graduates is up 1.47 million, and up about 800,000 for workers with some college education, including an associates degree. Jobs are down 222,000 for workers with a high school diploma or less.

"Until hiring picks up, these problems will persist," Bronars said.

He said it seems clear from the data that workers are not as confident about the economy as the experts are.

"People don't quit a job in a recession or if they think it will be very difficult to find a better job. In a healthy job market, people are optimistic enough to quit their jobs. Quits are still 30 percent below their pre-recession levels. So, with all due respect to the so-called economic experts, if the labor market is creating so many jobs, why aren't more people quitting their current jobs to move into better higher paying jobs? I will believe the labor market has recovered when we see an increase in quits," Bronars said.

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