WASHINGTON, April 2 (UPI) -- The stock markets and economists were taken by surprise Friday morning with the report that U.S. non-farm payrolls grew by 308,000 in March, the largest gain in four years, according to the Bureau of Labor Statistics.
However, in the separate Household Survey, BLS reported that unemployment increased 0.01 percentage points to 5.7 because more people joined the labor force last month. This means that though there was no job loss a slightly higher percentage of persons are unemployed.
The employment report is actually two numbers -- the payroll survey and the household survey that is used to determine the percentage of persons unemployed.
Economist noted that a key factor in the payroll increases for March was the ending of the West Coast grocery strike.
According to the BLS, manufacturing jobs held steady, construction added 71,000 jobs, while payrolls in the service sector showed a marked gain of 230,000 jobs, including 47,000 in the retail sector
The stock markets jumped on the news, with the Dow Industrial index spiking to triple digits at opening before falling back to trading around 80 points up in late morning to 10,451.
Throughout 2002 and 2003, the weakness of the labor market had been dogging the slowly recovering U.S. economy and has also been a thorn in the side of the White House -- particularly in more recent months with President George W. Bush facing an election year where the economy is one of two dominating issues.
The jump in non-farm payrolls for March gives the White House much needed political ammunition, though political opponents can still note that around 8 million Americans are looking for a job and can't find one.
The U.S. economy dropped into a short-lived recession early in 2001, nosing back into positive growth by the end of that year, but has had a checkered recovery since that period.
During the Bush administration around 2.3 million jobs have been lost. And while the unemployment rate has been holding fairly steady at around 5.6 percent in recent months, non-farm business payrolls have been showing slow growth, adding an anemic 21,000 for February (since revised to 46,000), which dashed market expectations a month ago for a February jump of 125,000 jobs.
This time it was different, with the March number far exceeding what had been a market-consensus expectation of slightly over 100,000 new jobs.
But while surprised by the strong number, many economists and job experts remained guardedly optimistic.
John Challenger, chief executive officer of the global outplacement firm Challenger, Gray and Christmas said, "It is inevitable that there will be strong months -- and this (Friday's report) is good news."
"But we are in for sporadic jobs growth in this particular economic expansion," he said.
According to Challenger, there will be some lackluster months as well. He noted that as the economic recovery continues, many workers who had effectively dropped out of looking will want to return to the workforce, and they will need jobs.
Challenger added, "This report is reflective that consumer demand has picked up."
William Hummer, chief economist at Wayne Hummer Investments, said: "Despite auspicious indicators, there were many who doubted the validity of the economic recovery. I think we finally have the piece of evidence that we've been looking for."
He added: "This will certainly cause the Fed to raise rates sooner than expected. If a recovery gains momentum, as we have seen today, the Fed will always act preemptively. I believe a policy change will now be implemented in the 3rd quarter, perhaps as early as August."
Economics professor Peter Morici, of Maryland University's the Robert H. Smith School of Business, hailed the jump in payrolls but added that he wants to see more successive progress on the jobs front.
"The March numbers are encouraging but we just may be picking up the jobs we didn't see in February. We need two more months like this one to be genuinely optimistic," Morici said. "I am afraid that owing to mismanagement of the currency and trade situation, the jobs potential of the economy will be substantially smaller at the end of this business cycle than it was at the beginning."
Noting the overall loss of manufacturing jobs which has taken place in recent years, Morici said, "All the president's tax cut did was allow people to go down to Wal-Mart to buy goods made elsewhere in the world."
Tom Silveri, president and chief executive officer of DBM, a large jobs training company, said: "Based on our consultants' input and collective view of the market, we continue to see the trend of 'open jobs' by companies now starting to get filled. If sustainable, this is a very good sign for the economy."
He added, however, "this trend is tempered by the continuation of the workforce trends toward industry consolidation, technology improvement creating manpower efficiency and the continuing trend of offshoring positions by U.S. companies."
For Richard W. Samson, head of the EraNova Insitute and author or "Mind over Technology," while the jump in payrolls is good news, there is a larger macro-problem of jobs disappearing to automation.
"Three hundred and eight thousand new jobs in March. Fantastic! Now let's leverage the euphoria to do the smart thing," Samson said. "Jobs seem to be coming back, but yesterday's jobs are still going away as continuing layoffs indicate. Companies, from IBM to Wal-Mart, can no longer afford to pay people for things that machines and software can do cheaper."
According to Samson: "Today's big trend is below the radar of the public's awareness but affects them dramatically. It's not offshoring but off-peopling" which he describes as the transfer of human tasks into all-automatic solutions -- "grocery checking into self-service counters, assembly work into automated factories, surgery into robotic arms that wield scalpels, college teaching into e-learning systems."
Samson added, "In spite of new hiring, companies will continue to squeeze out human costs because they have to."
