There has been so much good economic news dribbling in recently that most economists were expecting today’s jobs report to reveal that at least 200,000 jobs were added in March. The data are finally beginning to look more normal, auto sales have been climbing smartly, for example, and a string of good but not great reports was to be expected. Given that, the news that the economy only created 88,000 jobs comes as a kick in the teeth. We can expect the Keynesian choir to assert that sequestration is beginning to open the gates of hell.
There are two responses to that. First, the report is not as bad as it looks. Upward revisions to previous months added a whopping 61,000 jobs, so the positive jobs news we got today is closer to 150,000 for the first quarter as a whole. If one adds the fact that upward revisions are becoming the rule rather than the exception, it is possible that March will end up looking as anticipated in the fullness of time.
As for the sequestration, the spending cuts are just too small to be that visible in the data, especially this early.