Unemployment Report Still Not as Rosy as Headlines

Wednesday, 06 Apr 2011 08:42 AM

By Michael Carr

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Unemployment fell to 8.8 percent and the economy created nearly 300,000 jobs in March. This is certainly good news, but the Bureau of Labor Statistics Employment Situation Summary is actually over 40 pages in length, and some of those pages paint a less-glowing picture of the job market.

In a healthy economy, people tend to switch jobs. This may be done to pursue better opportunities like higher pay or better benefits. It may also be that a person is unhappy at one job and wants to work somewhere with more job satisfaction.

Only 0.6 percent of employees felt confident enough in the economy to leave their job willingly last month. Historically, this number has averaged more than 2 percent a month.

Wage growth is also a potential concern in the report. Average hourly earnings are lagging headline inflation. While the Fed insists that core inflation, which excludes food and gas, is a better measure of inflation, employees are forced to spend part of their wages, usually about a quarter of them, on these necessities.

Slow wage growth and lack of confidence in the job market are not usually associated with a growing economy.

These numbers bear watching in the months ahead to gauge the strength of the real economy, the one where employees live rather than the one the Fed hypothesizes about.

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