One month doth not a trend make. And yet, it's quite possible that the surprisingly high number of jobs created in March could finally mark the end of a largely jobless economic recovery.
Between the Bush tax cuts and the Federal Reserve's low interest rates, the economy is about as juiced as it can get. There's reason to believe, then, that the 308,000 jobs created in March - even if you discounted for the return to work of thousands of Californian grocery strikers - may not be an anomaly.
That's welcome news for laid-off workers who have been stuck in the longest hiring slump since the Great Depression. Politically, however, it could take a lot of wind out of the Kerry campaign, which has made the economy a central issue. Mr. Kerry's goal of creating 10 million new jobs in his first term could turn into no great feat at current job-creation rates. If, for instance, the first-quarter rate of an average 171,000 new jobs per month continued, then a Kerry administration would come close to its goal by sitting back and doing nothing.
And yet, were last month to mark the start of the long-awaited surge in job growth, Kerry would still have plenty to run on. The encouraging March numbers speak to the nation as a whole, and show growth in a diverse range of service industries. But key campaign battleground states, such as Ohio, suffer from job loss in the manufacturing sector. While manufacturing finally stopped shedding jobs last month, it did not gain any.
At the same time, the wage gap in this country is growing; the percentage of workers unemployed for more than six months is at its highest level in nearly two decades; and last month the number of people who want to work full time but can only find part-time jobs (that means low pay and no benefits) rose to 4.7 million.
As Kerry himself so often points out, outsourcing to educated workers in India, China, and elsewhere also threatens job dislocation among white-collar workers.
But as the job-creation picture clarifies, Kerry would do well to broaden his message. At the moment, it's narrowly focused, concentrating mostly on discouraging the flow of jobs overseas. In itself, this is a small part of the unemployment equation, and is expected to come back eventually to the US in lower prices, higher productivity, and more jobs.
In the same breath in which he talks about outsourcing, for instance, the Massachusetts senator should be telling voters how he plans to break the long-term cycle of only a third of the workforce holding college degrees. An educated workforce is a competitive one. The same could be said for bringing illegal immigration into the jobs discussion, since illegals put downward pressure on wages and take jobs from Americans.
Large structural issues are at play in the labor market. Kerry needs to find a way to bring them all together, instead of going after one slice.