Originally published by Mohamed El-Erian Chief Economic Advisor, Allianz; Chair of President’s Global Development Council
1. What is there to like:
The economy created 215,000 jobs in March: This above consensus outcome confirms that the US remains one of the world’s most powerful employment engines.
Average hourly earnings rose by 0.3 percent to $25.43: A notable (and much needed) increase in wages that takes the annual growth to 2.3%.
Both the civilian labor force participation rate and the employment-population ratio edged up, though not by much: While continuing to move up in a favorable manner, these two metrics continue to lag the improvements in other key indicators of the health of the labor market.
2. What is not to like:
The number of long-term unemployed remained at around 2.2 million: The longer people are without a job, the harder it usually is for them to regain employment.
Involuntary part-time workers remained at 6.1 million: These are workers hoping to get full-time jobs but are still unable to … which is bad both for them and for the unrealized potential of the economy.
The dispersion among major worker groups is still too high: This is of particular concern for teenagers and African-Americans whose unemployment rates of 15.9 percent and 9.0 percent are 2-3 times that for whites (at 4.3 percent).
3. In sum:
Overall, the March jobs report is a solid one, though not outstanding: It points to the continued strengthening of the US labor market while highlighting what are proving to be quite stubborn structural headwinds.