Unemployment rate drops 0.1 percent, showing 'positive momentum' in job market
The United States added 216,000 new jobs in March, mostly in the private sector job market, driving the unemployment rate down to 8.8 percent.
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Deeper problems remain
Despite the improvement in the March jobs numbers, there are still some significant issues in the labor market, says Mr. Silvia.Skip to next paragraph
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“The real issue is that we have a structural unemployment problem,” says Silvia. “We have a lot of people with the wrong skills, or they are living in the wrong spot, such as Michigan or upstate New York, or they are trapped in houses they can’t sell without taking a big loss.”
According to the March numbers, the number of long-term unemployed, defined as those out of work for 27 weeks or more, was 6.1 million in March. Their share of the unemployed rose from 43.9 percent to 45.5 percent.
At the same time, the number of people who are working part-time because they can’t find full-time work remained at 8.4 million, the same as the prior month.
“Taken together with workers that are marginally attached to the labor force – that is those who are out of work, available to work and have sought employment in the past year – the real unemployment rate stands at 15.7 percent, maintains the National Employment Law Project (NELP), an advocacy group in Washington.
Role of high gas prices
Over the short term, economists are also warily watching the affect of the rising price of gasoline. According to AAA, the national motorists' club, the price of gasoline is now $3.62 a gallon, up 24 cents a gallon in the last month.
“It should hurt us sooner or later, but so far it has not had a significant affect,” says Mr. Sohn. “When you look at the highways, there is not a significant thinning out of cars on the road yet.”
However, the gas price makes it harder to hire lower-wage workers, says Roy Krause, president of SFN Group, a large supplier of temp services based in Ft. Lauderdale, Fla. “If they are making $8.50 an hour, how far will they drive with gasoline at $4 a gallon?” he asks. “It’s having an effect on a lot of companies that moved to smaller cities so they could pay a lower wage.”
Another area Mr. Krause is worried about is the auto sector’s ability to operate with many suppliers in Japan still closed because of the earthquake. “It’s a problem that could be with us for a couple of weeks or months, but not for an extended period of time,” he says. “But, there is some slowing in those companies that make components for the automobile industry."
Despite those qualms, he says the jobs market seems to have a “positive momentum.”
“We don’t see a huge ramping up or expansion,” he says. “And we could have some months when we will be disappointed.”