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Has the Labor Market Turned a Corner?: Temporary and part-time jobs drive job gain in March

By Masao Suzuki

San Bruno, CA – In March, 162,000 new jobs were created, according to a monthly survey of businesses taken by the Labor Department. This was the largest number of new jobs created in a month in three years. This positive report may be a sign that the labor market has finally turned a corner following the worst recession in 70 years.

But the job gain in March was largely driven by more temporary and part-time jobs. In the monthly survey of business, more than half the new jobs were temporary jobs, including 48,000 temporary Census jobs. In a separate unemployment report based on a survey of households, the Labor Department reported that 264,000 more people were working in March, but that there were also 263,000 more people working part-time because they couldn’t find full time jobs. This surge in part-time workers pushed a broader measure of underemployment (that includes these part-time workers as well as those who gave up looking) another one-tenth of one percent to 16.9% in March. The official unemployment rate was steady at 9.7%, the same as in February. It is not clear when or if businesses will start to hire more permanent, full-time workers.

The unemployment report also showed a continuing surge in long-term unemployment. The average length of time an unemployed worker had been without a job rose to more than 31 weeks, the longest since this statistic began to be collected in 1948. The number of people out of work for more than six months rose by 414,000, to reach 44% of the total number unemployed. In a possible sign that the growing number of long-term unemployed were putting downward pressure on wages, the average hourly wage dropped in March as compared to February.

While the unemployment rate for whites remained the same as in February at 8.8%, the unemployment rate for Africans increased from 15.8% in February to 16.5% in March. The unemployment rate for Latinos also rose, but by a smaller margin, to 12.6% in March.

One sign of future job losses was the decline in workers in state and local government jobs. Many state and local governments are facing a double whammy of continuing budget deficits and the loss of federal government economic stimulus moneys later this year, which could lead to mounting job losses. The financial sector also continued to cut jobs (21,000 in March) and they face a potential slowdown as the Federal Reserve Banks continues to cut back on the large number of special loan programs designed to help the financial sector.

Despite the month of job gains, the labor market has a long way to go to make up for the more than 8 million jobs lost in the recession. The rising number of long-term unemployed, together with the growing number of people who have given up looking for work, show the continued need for a Federal Government Jobs Program and more aid to state and local governments. With the 75th anniversary of the start of the Depression era Works Progress Administration (WPA, later renamed the Work Projects Administration) on April 8, 1935, there is no better time for a new federal jobs program.

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