The jobs report issued by the Department of Labor Friday morning wasn’t bad news, which is at least something considering the disappointments it has produced so far this year, but the 192,000 new jobs produced in March don’t represent the sort of mix economists would really like to see.
The March report showed the lowest increase in “goods producing” jobs, like construction, manufacturing, mining and logging, so far this year at only 25,000. The largest bump was in the service sector, which produced 167,000 new jobs, or 87 percent of all new employment. It’s a good number, but a look at the details suggests that a revival of the American middle class isn’t exactly just around the corner.
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For example, 29,000 of the new jobs reported Friday, about 15 percent, were in the leisure and hospitality industry, and another 28,500 of were “temporary help.” Another 21,300 were retail jobs. All three of these sectors, which combined to account for 41 percent of job gains for the month, tend to pay relatively poorly and offer meager benefits.
Better paying lines of work added fewer jobs, if any. The automobile industry showed a net gain of zero new jobs, while manufacturing in general lost 1,000 jobs.
“Distortions created by the weather are beginning to reverse themselves,” said Diane Swonk, chief economist with Mesirow Financial. “That is good news for spring hiring. The broader concern is the lack of 'quality' hires, which is holding down wage growth along with ongoing slack in the labor market.”
Swonk noted Federal Reserve Board Chair Janet Yellen’s recent comment that “In some ways, the job market is tougher now than in any recession.” Today’s report, Swonk said, “doesn’t change that view.”
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However, not everyone took the addition of thousands of temporary workers as a negative development.
“Over the past year, nearly 250,000 temporary jobs have been added, the strongest 12-month growth in nearly three years,” wrote Doug Handler, chief economist with IHS Global Insights. “Typically, new jobs in this area are an omen of future hiring in other sectors.”
So more jobs may be coming. Whether they’ll be quality jobs still isn’t clear.
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