Today’s report from the Bureau of Labor Statistics shows the economy added 98,000 jobs in March. While this is considerably lower than the past few months, this is likely due in part to seasonal adjustments not capturing the early March winter storms and a mild pullback after February’s strength and unusually mild weather, and it is just enough to keep up with working-age population growth. Turning to the household survey, the unemployment rate fell to 4.5 percent in March (reflecting a significant divergence in employment growth in the two surveys). The unemployment rate has been slowly but steadily declining since the depths of the Great Recession, but it still has a ways to go before we can safely say we are at full employment. Remember that the economy sat at roughly 4.0 percent for two solid years in 1999 and 2000, without sparking inflationary pressure. The Federal Reserve should wait until the economy reaches genuine full employment before raising rates, as it is widely expected to in June.
Of course, while policymakers will be quick to take credit or cast blame for any changes in employment, it is important to remember most month-to-month changes are simply the continuation broader trends already underway before the current administration took the wheel. EPI’s recently launched Autopilot Economy Tracker, which compares several key economic indicators against a baseline projection, will be updated later today with this month’s numbers.