The jobs report for last March was a big disappointment, one that spurred talk of a new recession. Now we learn that report was simply wrong, that March was actually a very good month and that jobs rose much more rapidly in 2012 than we had previously been told.
Last April, with the presidential campaign heating up, the Labor Department reported that its survey of employers showed the economy added only 120,000 jobs in March, far below forecasts. The unemployment rate — based on a separate survey of households — did decline a bit, to 8.2 percent, but that was widely dismissed as indicating some people gave up looking for work.
From the next day’s Times:
Republicans pounced on the lower than expected payroll numbers, with the party’s front-runner, Mitt Romney, declaring, “This is a weak and very troubling jobs report that shows the employment remains stagnant.” Speaker John A. Boehner and Representative Eric Cantor, the House majority leader, also deplored the numbers and laid the blame for them at Mr. Obama’s feet.The report came out on Good Friday, when the stock market was closed, so investors had all weekend to ponder the numbers. They did not like what they saw, and the Dow tumbled on both Monday and Tuesday.
Now we know what really happened in March. On Friday, the Labor Department issued its “benchmark revision” for the 12 months through March 2012. The new numbers are based on far more reliable — but slower to arrive — counts of the the number of workers for whom unemployment insurance premiums were paid. It turns out 205,000 jobs were added that month.
For all of 2012, we are now told that the average month added 181,000 jobs. A month ago, we were told the average for the year was only 153,000, basically the same as in 2011. With the revisions, we are told that the 2011 average was really 175,000.
At the end of last year, the official figures showed employment had risen 3.7 percent from the bottom in February 2010 to the end of 2012. Now that figure is 4.1 percent.
A year from now we will get benchmark revisions for the last nine months of 2012. It is quite possible the 2012 annual average will then rise further, to more than 200,000.
A couple of weeks ago, speaking in Hong Kong, Charles Evans, the president of the Chicago Fed, was asked about what would show things were getting better.He replied, according to Reuters, “One good indicator of labor market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months. We’ve been averaging about 150,000, but it’s been very uneven.”