It is too early to say whether this morning’s seriously disappointing jobs report — 126,000 jobs added in March, only about half of what was expected — is the end of the run of strong jobs growth we saw for most of 2014. (Some called it the Obama boom; I prefer to think of it as the Mitch-McConnell-is-almost-majority-leader boomlet.) But it’s not a good sign, combined with the fact that January and February’s numbers were revised down noticeably, which is sometimes seen as evidence of deeper trends.
Growth in the first three months of the year has now averaged 197,000 jobs a month, which is still not bad, but it’s already a tick down from 2014, which saw about 220,000 jobs added per month. The past few months’ worth of other economic data hasn’t been good, either: Estimates for GDP growth in the first quarter of this year are now tracking around 1 percent on an annualized basis. Observers had been wondering why jobs growth didn’t seem to be affected — maybe now it is.
And all of this comes on top of the fact that wages never started growing at an encouraging rate (they are running a little bit above inflation, though more hours means that workers’ earnings are rising). The still-optimistic take is that there were three obvious weak industries in the jobs report, and there’s a case that they’re not lasting problems.
Mining, a good chunk of which includes oil and gas drilling, lost 11,000 jobs, after a spectacular run of jobs growth that continued through 2014. This isn’t a very large industry by employment, period (it hit 900,000 jobs in January), but big losses in an industry is enough to make a few jobs reports look worse. The question here will be whether oil-and-gas production has to be curtailed significantly in light of lower oil prices — it kept rising as oil prices dropped because the oil was just being put into storage, but production finally seems to be slowing a bit. But low oil prices are a boon to much of the rest of the American economy, so this isn’t a great cause for concern unless you live in North Dakota or West Texas.
Construction lost 1,000 jobs, after it had been gaining steadily for a long time. That can in part be blamed on this winter’s bad weather, although broader bad economic data has raised questions about the strength of the housing market. We’ll have to see.
Manufacturing also lost 1,000 jobs, and it had also been gaining steadily for a long time. This is being blamed on the fact that the dollar has appreciated dramatically against other currencies in recent months, which, like low oil prices, has some upsides.
A bit of bad news, though: Even if you strip out the above industries from the report, it is still weaker than the good 2014 reports: The economy excluding mining, construction, and manufacturing added 139,000 jobs in March, while for most of 2014 that number had averaged over 200,000.
Of course it’s too soon to tell if “the period of labor market outperformance,” as JP Morgan chief economist Michael Feroli put it, is behind us. The depressing news is not just that this could be the case — it’s that 2014, which was by no means saw a real boom, is what qualified as “outperformance” in this recovery.
The upshot, which Ben White discusses at length in Politico: Just when Obama was starting to do a victory lap for his finally-robust recovery, it looks weak again — weak enough that Hillary Clinton won’t want to run on it, and Republicans can promise a better option.