More Months Like This, Please

U.S. Firms Add 308K New Jobs in March (washingtonpost.com)
It had to happen eventually. The only question was whether it would occur in time to benefit President Bush politically or if it occurred next year to the benefit of a President Kerry. One month is not a trend but job growth is pretty much an inevitability — the usual caveats about productivity apply — with a growing economy and the tell-tale turnaround in business investment that happened late last year. There’s even been a decrease in the number of discouraged workers — people that stop looking for work and are not considered a part of the work force — which actually caused an increase in the unemployment rate, in spite of the 308,000 jobs, because they started looking again. It’s a sign of optimism.

Last month the Democrats ridiculed President Bush for the 20,000 jobs created in February. Will they congratulate him now for the 308,000 jobs created in March?

The number of jobs in the United States increased sharply in March after months of relatively laggard growth, the Labor Department reported today.

In the largest gain since April 2000, non-farm payrolls jumped by 308,000, well above the range of expectations among economists, who had forecast an increase of between 103,000 and 120,000 jobs.

The figures are likely to give the Bush administration something to brag about, after months of criticism from Democrats about the “jobless recovery.”

The Labor Department also revised upward the job growth numbers for January and February. Companies added 205,000 jobs in January and February, instead of the 118,000 total for the two months reported last month.

That average growth of about 177,000 over three months, some economists believe, may raise the likelihood of the Federal Reserve Board boosting interest rates sooner rather than later.

“This is what the Fed wanted to see before tightening” interest rates, said Stephen Stanley, chief economist at RBS Greenwich Capital. “I had been saying today the Fed would first move in August. It looks more like June now,” he said in a telephone interview.

I don’t know what Greenspan uses as a crystal ball to determine when inflation is on the horizon, but I hope he uses that to determine whether he will raise interest rates, rather than an increase in jobs. If jobs are increasing and inflation, or inflationary expectations, stay down it would seem prudent to leave interest rates alone, regardless of the job situation.

UPDATE: Dodd has more and he notes that we’ve actually had a net increase in jobs due to offshoring. Read it.

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