About the March Jobs Report

There has been much discussion in the media about the recent jobs report which showed only 126,000 jobs created in March. I think it is too early to panic about a recession. From 1992-2006, each non-recessionary year except 1994 had at least one month with job creation under 200,000. In fact, for each non-recessionary year, the median number of months under 200K was six. Furthermore, 1995, 1996, and 1997 each had one month of NEGATIVE job creation. And those were years of very strong economic growth.

In March, the alternative U6 unemployment rate (which includes discouraged workers who have stopped looking for work and part-time workers wanting full-time work), fell to 10.9 from 11.0. The U6 rate has fallen from a peak of 17.1 in April 2010. I know that unemployment is still a problem, and I do not want to be insensitive about that, but the U6 is currently at the same level as in 1994, and that was right before one of the strongest economic advances of the 20th century.

The 2007-2009 financial crisis was, in some ways, more like a depression than a recession. The extent of damage done in the economy may explain why the recovery has been slower than usual. But as long as the U6 unemployment rate continues to trend down, and we don’t get consecutive months of negative job growth, I would assume that the recovery is still on.

Monthly Job Creation
Unemployment Rates