Got to like the fresh jobs data from the Labor Department. It's perhaps the best sign yet that while the imploding housing market may yet kill America's current economic expansion, it won't happen anytime soon. Nonfarm payrolls rose a stronger than expected 180,000 in March. What's more, the prior two months' payrolls readings were revised higher by a total of 32,000 to a combined 275,000as has happened the previous nine months.
Just as encouraging, the unemployment rate fell to 4.4 percent in March from 4.5 percent in February, even though the civilian labor force rose by 195,000. That means the unemployment rate didn't go down just because discouraged workers decided to drop out of the job market.
John Silvia, chief economist at Wachovia, told clients this morning: "Employment gains ... suggest forward momentum for the economy with better gains in consumer incomes and spending. ... On the wage front, earnings were up 4.0 percent, enough to maintain Fed inflation concerns."
The econ team at Bear Stearns summed up the numbers this way:
"Through the weather-related ups and downs in the first quarter, nonfarm payrolls have averaged an increase of 152,000 per month ... versus an average 12-month gain of 164,000. This is not the stuff that major slowdowns are made of. ... We still think the market is premature in looking for rate cuts, and our forecast remains that when the Fed eventually adjusts rates next, it will be an insurance hike to rein in inflation pressures."
Romney economic adviser responds
In yesterday's Capital Commerce posting, I chatted with Cesar Conda, one of presidential candidate Mitt Romney's top economic advisers, about his views on government tax policy and economic growth. After reading my postingparticularly the snarky headline "Romney Adviser: Cut Taxes for Companies, Not Kids," Conda jotted off this E-mail to me:
" I'm not opposed to cutting taxes for kids! You asked me what is the best economic policy. My point was that given a finite amount of budgetary resources available, pro-growth tax changes that produce some revenue feedback ought to be a higher priority. But I do support extending the Bush tax cuts (which includes the $2,000-per-child credit). In fact, I believe the child credit should eventually be doubled, because it's good social policy. (And I personally wouldn't benefit from the expanded credit, because my income exceeds the credit's income threshold.) Because the revenue cost of doing so is high (it produces no revenue feedback effect), policymakers who want to promote economic growth and job creation might either make this a lower priority or figure out ways to cut the revenue cost (phasing it in, further limiting the income thresholds, etc.). Again, this is my personal view and does not represent that of the Romney campaign."