Where Are Those US Jobs? Bars, Hospitals, Service Sector

Friday, 01 Apr 2011 12:32 PM

 

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The U.S. labor market is finally luring back some discouraged workers. They may find the most "help wanted" signs at bars, restaurants and doctor's offices.

Friday's employment report for March came in largely as expected. There were 216,000 jobs created last month, primarily in the services sector, and the unemployment rate dipped slightly to 8.8 percent.

The details behind the headlines looked solid, if unspectacular. The dip in the jobless rate reflected improved hiring rather than discouraged workers dropping out of the labor force. The employment-to-population ratio, a measure of how many Americans are working, rose slightly to 58.5 percent.

For the handful of Federal Reserve officials who have begun sounding the inflation alarm, wage pressures were not an issue. Average hourly earnings held steady during the month and have risen only 1.7 percent from a year ago, unchanged from February's rate and well below prerecession levels.

WHERE ARE THE JOBS?

• Hiring in March was concentrated in the services sector, with healthcare accounting for nearly one-quarter of the net job gains. Food and drinking places added 26,500 positions.

• Temporary hiring accounted for 28,800 jobs, continuing a recent run of solid growth. Economists often look at temporary jobs as a leading indicator of future full-time hiring, although some say companies are relying on temporary staff to fill longer-term needs.

• The public sector was once again a drag. Local governments cut 15,000 positions last month, mostly in education, another sign of how tight budgets are affecting employment.

• There were 921,000 discouraged workers counted in March, down from 1.02 million in February.

 

INFLATION WATCH

• Average weekly hours worked held steady at 34.3, and earnings per hour were flat at $22.87.

• There is no evidence the recent spike in food and energy prices was translating into higher wage demands, which should provide some comfort for the inflation hawks.

• For workers, however, flat wages in the face of rising costs means lower discretionary spending power.

• For the Fed, the figures point to no imminent interest rate rise despite a flurry of recent comments from the hawkish wing suggesting a hike could come sooner than expected.

© 2014 Thomson/Reuters. All rights reserved.

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