Yesterday the March Jobs Report was released, showing a significant miss on expectations, with only 126,000 jobs created versus the 245,000 Economists were expecting. Also released were substantial revisions on the January and February reports, showing that a total of 69,000 previously reported jobs never did in fact exist. If the margin of error established by the previous two reports is applied to the March report, there may have only been 91,500 jobs created in March.
The slowing of jobs growth flies in the face of the Obama Administration’s touting of the success of the recovery, most recently celebrated in Louisville, Kentucky yesterday where President Obama said,“Our economy has been growing, we’ve got momentum”.
More worrying is that the number of Americans not participating in the Labor Force rose to a 37-year high with 93,175,000 Americans aged 16 or older not working or looking for a job. That is more than 37% of the US Population, excluding persons who are not in the Military or otherwise institutionalized.
If the economic recovery and jobs growth stalls it will make the case the Democrats will need to make for a successful 2016 push–that Obama’s policies have worked–much harder to sell.
The Administration, however, remains unconvinced.
Beyond Friday’s jobs number, a wide range of other indicators suggest growth nearly stopped in the first quarter of the year.
Manufacturing is declining, and consumers are not spending despite a huge cash infusion from cheap gas prices. The housing market remains relatively weak. And while the jobless rate is close to where it was before the financial crisis, middle class incomes are not rising, the size of the labor force remains near a 30-year low and few economists see prospects for much faster growth on the horizon.
“The economy right now is very much at risk,” said Lindsey Piegza, chief economist at investment firm Sterne Agee. “We are in a soft patch unquestionably. The question is how much of a soft patch. We are slowly losing momentum, and I don’t think the rest of the year is going be anything to write home about.”
White House officials insist that there are many bright spots in the current economy and they largely dismiss alarmism over a possible backslide.