Headlines reporting “Jobs Report: More of the Same” rang out this morning from numerous media outlets but does two months of lackluster numbers actually reflect the trend these banners imply? Or does it illustrate a forgetfulness which blurs all things beyond the haze of the previous 2 months?
Yes, the jobs reports for both March and April were below expectations, this is true. In of itself, taken out of context, these numbers are not impressive fostering concern about our economic stability. In recoveries such as this, it’s not the short-term fluctuations that tell all, it’s the broader trends that matter. A disservice is paid to everyone if these figures are not placed upon the backdrop of the larger economy.
April 2012 represented the 26th consecutive month of private sector job growth in which 130,000 new jobs came into being. Updated figures showed February and March were better than originally thought with 53,000 new jobs added to the previously reported totals of 227,000 and 120,000 respectively. The economy created in excess of 200,000 jobs per month from December 2011 to February 2012 with manufacturing jobs leading the way. Gross Domestic Product (GDP), one of the primary indicators of a country’s economic health, rose steadily from 0.4% in March 2011 to 3.0% by the end of the year. Production dropped off to 2.2% for the first quarter of 2012 but considering the historic, quarterly average for the US is 3.8%, that decrease is not of significant concern.
The last quarter of 2011 and the beginning of 2012 surpassed economists’ expectations, especially after the speculative fear of a double-dip recession after last summer’s debt ceiling battles and the nation’s credit downgrade by Standard & Poor’s. Concerns over this two month slowdown are, at present, unwarranted. Traditionally, there is a slowdown in any given year’s first quarter, after the holiday season. This year that was not the case. With robust job and production growth and warmer than usual winter, consumer spending held steady and production and hiring continued. The slowdown of the last 2 months may simply be that displaced seasonal retraction normally seen from January to mid-March before people begin gearing up for summer. Coupled with rising gas prices during that same time period these unimpressive figures are understandable. As gas prices continue to fall and summer arrives the economic indicators will return to their positive trends.
Within the gone in a flash news cycle what came before is all too easily forgotten. In the mad dash to report the sensationalistic, the most dire the blips overshadow the bigger picture. One cannot make educated judgments based on narrow-viewed reporting. In the economy, with this recovery in particular, it’s in the trends where the pertinent information is found.