Laboring To Improve


How's the labor market doing? That depends on your perspective:

The good: Over the last six months, U.S. nonfarm payrolls expanded by more than 950,000 jobs, adding at least 132,000 every month. The private sector accounted for the growth, with government payrolls roughly flat.

The bad: After hitting an all-time high above 138 million in January 2008, payrolls shrank 6.4% in just over two years. We last saw such a sharp drawdown during World War II. Nearly three years after the trough, payrolls remain 3% below peak levels.

The future: Even at the current rate of hiring, it will take more than two years to get back to the 2008 highs. In the second half of 2012, employment rose by an average of 160,000 jobs a month, a pace that would bring payrolls back above 138 million in January 2015.

Consistent hiring shows not only that businesses have the cash to spend on salaries, but also that they are optimistic enough about the business climate to deploy that cash.

The Blue Chip Economic Indicators consensus projects unemployment of 7.8% for the March quarter — roughly in line with current levels — falling to 7.5% in the December quarter. Those targets reflect expectations for consistent, albeit moderate, growth in payrolls.

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