State of the Job Market

State of the Job Market - March 2014

  • Businesses added 192,000 new jobs in March (similar to February’s 197,000), as weather turned less disruptive. The March report, particularly the bounce in aggregate hours worked, bolsters expectations of faster growth this spring. The Fed’s plan to wind down asset purchases by the end of 2014 remains on track.
  • Hiring was mostly close to recent trends across the board. Factory employment eased.
  • Aggregate hours worked, a proxy for GDP, were depressed by bad weather this winter but surged 0.7 percent in March.
  • The Household Survey echoed similar favorable trends found in the Establishment Survey. Employment has risen 245,000 monthly on average in the past six months, similar to the 188,000 average monthly nonfarm payroll gains over the same period. The labor force appears to be rebounding as dropouts return in search of a job.
  • Unemployment currently numbers 10,486,000 and that’s 6.7 percent of the labor force. This is 3.5 million more than normal, when the unemployment rate is 4.5 - 5.0 percent. The unemployment rate doesn’t capture all unemployment and that is why the Federal Reserve recently de-emphasized it, at least for now. Five million or more unemployed are not included in the unemployment rate, including:

    • The equivalent of 1.5 million unemployed related to part time workers. The 7.4 million part-timers who want full-time work are 2.7 million more than normal (in steady state roughly 3 percent of the labor force works part time involuntarily). Part-timers work half time, so the 2.7 million excess of part-timers is equivalent to 1.5 million unemployed people. They’re not picked up in the unemployment rate.
    • Roughly 4 million 25- to 45-year olds have dropped out of the market since 2007. They are not counted in the number of unemployed. They didn’t retire. 
  • Average hourly earnings fell back in March and are rising 2.1 percent annually.
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Meet the Author

Jim Glassman
Head Economist

As Managing Director and Head Economist for Chase Commercial Banking, Jim Glassman provides market insights to help clients better understand the changing economy and its impact on business. A publisher of independent research on the principal forces shaping the economy and financial markets, Glassman is regularly cited in the financial media, where he is also a frequent commentator on economic policy issues.

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