Job growth surges in US by 308,000
Bush upbeat; Kerry cautious
The recovering US economy created 308,000 jobs in March, the largest monthly increase in nearly four years. The unexpectedly strong numbers rebutted talk of a "jobless recovery," which has become a major issue in the presidential campaign.
Almost every industry showed healthy growth in its payrolls, particularly construction, which bounced back because of good weather, and retail, which was sparked by the return of striking California grocery workers to their jobs. Manufacturers, which shed jobs for 44 months, stabilized in March, contributing to the spike in job gains.
The unemployment rate moved up a tenth of a percentage point last month to 5.7 percent. But even that seemingly bad news was interpreted as positive because more people were encouraged by a brighter economy to reenter the labor market and search for work and so were counted in the jobless tally.
"It's about time," said Jeoffrey Hall, economist for Thomson Financial IFR, a Boston financial adviser. "A lot of things we have spelled as positives for the jobs picture finally came due in March. The surprise is not so much there were jobs but how many jobs."
The monthly reports have proved critical to the early election maneuvers of President Bush and the presumptive Democratic nominee, US Senator John F. Kerry of Massachusetts. Each used the new numbers to appeal yesterday to voters. Kerry noted the administration has not extended benefits for 1.1 million unemployed Americans, and said one healthy monthly report could not reverse the record of an administration that has overseen staggering job losses. Since Bush took office, 1.8 million jobs have disappeared, according to federal data through March.
Bush basked in the March numbers as he spoke to supporters at Marshall University in Huntington, W.Va., a battleground state where a recent poll says votes are split between him and Kerry. "Today, the statistics show that we added 308,000 jobs for the month of March," he said. "There's more we need to do," he said, but "the policies are working."
"Let us not leap to conclusions," said William Schneider, a political analyst for the American Enterprise Institute. "It's not a triumph, not victory -- it's a hopeful sign," he said. But "that's often reason enough to win an election."
The March gain appeared large in comparison with initial reports for February, which said the economy created just 21,000 jobs that month. But yesterday's revision more than doubled the estimate of jobs gained in February, to 46,000. January job gains rose, from 97,000 reported initially to 159,000 in the latest estimate. The magnitude of these revisions are normal and small relative to a civilian labor force numbering 146.6 million, economists said.
"Labor markets didn't turn suddenly strong in March after a weak February," said Steven Wieting, senior economist for
What appeared to be a sudden reversal in the jobs picture demonstrates the difficulty the government has estimating gains or losses, particularly as an economy turns around. The federal Bureau of Labor Statistics frequently revises the job estimates as it receives more information from businesses. One-third of US firms are surveyed to prepare the employment report, but it takes multiple surveys to receive all the data.
Absent up-to-date numbers on hiring by small and new businesses, for example, the bureau typically estimates job gains based on the prior year's experience. The government may substantially revise the estimate upward or downward as numbers come in that show how much stronger or weaker small business hiring really is. "That's what happened in January, February, and March," said Heather Boushey, an economist for the Center for Economic and Policy Research in Washington. "We may have been underestimating job growth in the last couple of months."
The sheer numbers of jobs created stunned investors early in the day yesterday, driving the markets up minutes after they opened. The Dow Jones industrial average held on to its early rally, rising 97.26 points for the day, nearly 1 percent, to 10,470.59. The technology-heavy Nasdaq Composite index surged 42.16 points, up 2 percent, to 2,057.17.
A troubling aspect of the report for home buyers is that it could lead to a rise in the low mortgage rates driving the housing market. If the economy heats up too much, the Federal Reserve might be forced to increase rates to temper inflation. But an economist for
Some economists said an improved job market isn't benefiting employed workers. Average hourly earnings rose 2 cents last month, to $15.54 an hour. Adjusted for inflation, Boushey said, wages have fallen in recent months.
In a press conference on Beacon Hill yesterday, Kerry said, "All of us are pleased with the job numbers for this month." But, he criticized the administration on its economic record. "The fact is that the deficits, which go out as far as the eye can see, the lack of any one single manufacturing job in those jobs, and the huge numbers of jobs that are leaving for overseas, tell the real story of the economy of our country."
Kimberly Blanton can be reached at blanton@globe.com. Glen Johnson of the Globe staff contributed to this report.
