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What To Make Of The Numbers From The March Jobs Report

Apr 6, 2018
Originally published on April 6, 2018 11:44 pm
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AUDIE CORNISH, HOST:

The March jobs report is out today. The Labor Department has cited a 4.1 percent unemployment rate - about the same as it's been for the last six months. Most economists consider the country to be close to full employment. Cardiff Garcia is here. He co-hosts Planet Money's The Indicator podcast. Hey there, Cardiff.

CARDIFF GARCIA, BYLINE: Hey, Audie.

CORNISH: And The Indicator, that's where you guys every day tell one short story that helps make sense of the economy. So we want to talk to you about this jobs report because some people are saying that this is weak growth that we're seeing. Does that sound right?

GARCIA: Don't believe the negative hype, OK? This jobs report did show that there was a relatively weak pace of jobs growth in March, but that's because of a couple of weather-related industries, so construction sector lost jobs, leisure and hospitality was about flat. If they'd had even mediocre growth, which they probably will in the coming months, then this jobs report would have been fine. So for the most part, it looks like the labor market continues plugging along just as it has for the last few years.

CORNISH: All right. So bypassing the hype, what stuck out to you?

GARCIA: There is one number that's really intriguing to me, which is that more than 7 out of the 10 people who were newly employed in March were not even looking for work in February. And this is really kind of interesting because it suggests that companies are really going out of their way to try to find workers - right? - because the labor market has been relatively strong.

And so they're even looking for workers that aren't in the labor force. They're trying to pull them into the labor force. And they can do that in a few different ways. One way is to raise wages, but another way is to pursue workers that traditionally they might have been a little bit reluctant to hire, so people maybe with big gaps in their resume, maybe people with prison backgrounds and disabled workers. Of course, companies are not supposed to discriminate against disabled workers, but it happens.

And what's happening - and we see this in the numbers - is that more and more people who had cited disability as a reason for not looking for work are now in fact finding work. It suggests that companies are indeed accommodating categories of workers that in the past they might not have wanted to hire.

CORNISH: Another thing I understand is that there's been a shift in the growth of middle-class jobs. What does that mean?

GARCIA: Yeah, this is really interesting. Over roughly the past year, it looks like middle-wage jobs have been climbing at a faster rate than either...

CORNISH: What's a middle wage?

GARCIA: A middle-wage job is like construction or manufacturing - right? - jobs that traditionally have been, like, quite solidly middle-class jobs and that have been effectively hollowed out for the last few decades. So you've had growth in, like, very high-income jobs and growth in very low-income jobs. But in the past year, it looks like that hollowing out seems to have reversed. And that is according to an analysis by economist Jed Kolko. So there's actually been a faster pace of growth in middle-class jobs. And actually, it's a bit of a mystery as to why this is happening. It's mostly happening in the construction and manufacturing sectors. They've had a faster pace of jobs growth than other parts of the economy.

CORNISH: Now, before I let you go, I want to ask you about a story we've been reporting on all week, which is the trade tariff threats bouncing back and forth between the U.S. and China. We know that it affected the stock market. Do we know if it could affect the next jobs report?

GARCIA: It can certainly affect jobs growth. There is not any evidence that it has affected jobs growth yet. And in fact in March, those parts of the economy that have to rely on buying steel and aluminum to make their products actually had more jobs growth than the parts of the economy that make metals, that make steel and aluminum. But it's very early. This is all still at sort of the threat level, right? And so in terms of how tariffs might affect future jobs growth, that's all still a little bit out there.

CORNISH: That's Cardiff Garcia, co-host of Planet Money's The Indicator podcast. Thank you for coming in.

GARCIA: Audie, a pleasure. Transcript provided by NPR, Copyright NPR.