U.S. Economy Added 215,000 Jobs, Unemployment Rose To 5 Percent In March
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The U.S. economy gained 215,000 jobs last month. That's a solid performance by just about all accounts. But the unemployment rate did not go down. It went up a bit to 5 percent. And as NPR's Chris Arnold reports that's not necessarily a bad sign.
CHRIS ARNOLD, BYLINE: For years, as the economy's recovered, we've been waiting for this thing to happen. We've been waiting for discouraged workers who've given up looking for a job to say, hey, actually things are looking good enough. I'm feeling pretty optimistic. I'm going to go look for a job now, too. And now that's happening.
DEAN BAKER: Yeah, you know, I'm really excited by this report because this has been a trend now - four or five months - when there's been a lot of people re-entering the labor force, particularly prime age workers.
ARNOLD: Dean Baker co-directs the Center for Economic and Policy Research. He says this is why the unemployment rate went up in March from 4.9 percent to 5 percent. Because even though we gained more than 200,000 jobs, that was overwhelmed by the number of people coming back into the labor force to look for work.
BAKER: And this has been a big debate among economists ever since, you know, the trial for the downturn. We saw all these people leave the labor force, and the question was - were they gone permanently? And at this point, it looks like we have pretty good evidence that they're coming back when they see the opportunities.
ARNOLD: And Baker says that's a very big deal.
BAKER: Well, yeah. I mean, this is huge in terms of thinking of what the economy's potential is.
ARNOLD: Here's the big issue. According to Baker, if workers are now coming off of the sidelines, it's safe for the Federal Reserve to keep stimulating the economy with low interest rates because if there's a larger pool of workers looking for jobs, then it's easier to keep inflation under control.
BAKER: I think we still have millions of people who, you know, would like full-time employment or working part time or who are out of the labor force altogether and almost certainly would like to get back in and have jobs, which means there's no reason for the Fed to be slamming on the brakes.
ARNOLD: Baker's think tank leans to the left. Others might disagree about the Fed policy. But it's hard to argue about one thing, the U.S. economy is continuing to add a solid number of jobs month after month. Nariman Behravesh, who's chief economist with the global forecasting firm IHS.
NARIMAN BEHRAVESH: For two years now, we've had very strong employment growth. And this is the strongest two-year employment growth since the late 1990s, since '98 and '99. And that says something to have growth in employment to be as strong as it was during the last boom that we all really enjoyed and really liked. This is a good thing. So I interpret these numbers as being, you know, a very good sign that the U.S. economy is on very solid ground.
ARNOLD: What's more, Behravesh says, the jobs being created aren't all low-wage jobs. We're seeing higher-quality jobs, too. Still, for the average person, wage growth remains stubbornly anemic. But if this solid job creation goes on long enough, Behravesh says we're bound to see better wage gains, too. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.