February’s jobs report was at least mildly encouraging, as Neil Irwin reports. Thanks in part to the housing recovery, payroll employment increased by 236,000 on a net basis. To put this in context, however, job creation at a rate of 236,000 jobs a month will mean that the U.S. will return to full employment by 2019, according to the Hamilton Project’s “jobs gap” calculator.
What remains to be seen, however, is if the new regulations, penalties, and taxes embedded in the Affordable Care Act will have a dampening effect on job creation. One possibility is that incentives to hire workers on a part-time rather than a full-time basis will exacerbate underemployment as the unemployment rate falls. Regardless, the latest jobs report is welcome news, and it might strengthen the case for the Fed to stay its current course.