Today's jobs report offered a long-awaited reason for optimism: Finally, the employment market looks to be improving in a meaningful way.
The 216,000 jobs the Labor Department reports were created in March hardly puts a dent in the massive losses of the last three years, but it beat what economists expected, about 200,000 jobs, and it's significant enough to signal an upward trend. Combined with upward revised numbers for the last two months—68,000 for February, up from the originally reported 63,000; and 194,000 for January, up from 192,000—we can now positively say the job market is on its way to recovery.
"It's encouraging," says Diane Swonk, chief economist of Chicago-based financial services firm Mesirow Financial. "We've got a lot of uncertainty going forward, but it is sort of a ray of hope amidst what's been a very cloudy economic outlook."
Yet this recovery has proven itself slow, and many job seekers aren't yet feeling the effects of newly created jobs. The unemployment rate dropped only slightly in March to 8.8 percent, down from 8.9 percent in February, and economists say that number is misleadingly low because so many unemployed have given up looking for work. The rate may even increase again before it drops.
Perhaps more alarmingly, the number of long-term unemployed, people who have been jobless for 27 weeks or more, is still at 6.1 million. "That's what you're really worried about," Swonk says. "The longer you're out of the labor force, the harder it is to get a job."
Growth in the private sector is driving the recovery; private payrolls increased by 230,000 jobs in March. Professional and business services made a strong showing, expanding by 78,000 jobs, though much of that gain is attributed to temporary help services, which shows some employers still aren't confident enough to fill full-time positions. Health care, a sector that's provided constant growth recently, added 37,000, as did leisure and hospitality. Manufacturing gained 17,000 jobs, and mining added 14,000.
Hearing about this growth, some employees who are unhappy at work say they'll consider leaving their jobs to look for another position. But Peter Morici, a professor of international business at the University of Maryland and former director of economics at the U.S. International Trade Commission, warns workers not to be over-confident. "Unless they have a speciality that's in high demand, they are going to have trouble finding another job," he says. "This is a mediocre job market. It looks so good because things have been so bad."
To put things in perspective, we need to gain about 350,000 to 400,000 jobs a month to return to our pre-recession unemployment rate, Morici says.
While March's report highlighted some of the market's bright spots, local government was not one of them. The sector continued on its downward trend, losing 15,000 jobs during the month, bringing total losses since September 2008, employment's peak, to 416,000.
Construction, too, is still weak. While the sector gained jobs last month, it showed no improvement in March. "We lost 2 million construction jobs since the peak," Swonk says, "and those jobs are just not coming back."
As for what to expect moving forward, most economists are cautiously optimistic, expecting slow improvement while hoping for something better. A survey from CareerBuilder and USA Today that showed this year's first quarter boasted the strongest hiring in three years predicted similar growth during the next quarter, expecting more than 28 percent of employers to hire full-time employees. "Our latest survey points to continued, measured gains over the next three months," CareerBuilder CEO Matt Ferguson wrote in a release.