The job numbers look great. So why does the economy feel so bad? – Grid News


The job numbers look great. So why does the economy feel so bad?

If you ask people what they think of the economy, they’ll tell you it’s in the pits. Prices are rising, restaurants aren’t open as long as they used to be, and some of the stuff that regularly appeared on fully stocked shelves isn’t there anymore.

But when it comes to the basics — are people working? Can they get a better job if they leave their current one? The data tells a much more positive story. The American economy has been seeing strong job growth for months now. While the economy still hasn’t fully recovered from the ongoing shock of covid, the jobs data reported by the Bureau of Labor Statistics for March shows that when it comes to jobs, at least, things are looking up.

Grid’s politics and ideas editor, Kay Steiger, talked with Matthew Zeitlin, Grid’s domestic economics reporter, about what this report means. This interview has been edited for length and clarity.

Kay Steiger: What’s the headline numbers in this report — how many jobs were created, and how does this compare with expectations?


Matthew Zeitlin: The Department of Labor reported that 431,000 new jobs were created in March and that the unemployment rate fell to 3.6 percent from 3.8 percent.

The February and January jobs numbers were revised as well, with the January number now at 504,000 compared to 481,000 and the February number rising 72,000 from 678,000 to 750,000. Job growth has been strong for the last six months.

Economists surveyed by Bloomberg expected 490,000 new jobs, so the numbers came in just slightly under expectations.

KS: Where are we in the labor market recovery after covid? Is the pace of new jobs picking up or declining?

MZ: While the economy is quite different than the one that existed before covid, as the Bureau of Labor Statistics points out, when you look at the unemployment rate and the total number of unemployed, they are “little different from their values in February 2020.”


In some aggregate sense, the economy has made back much of the ground it lost due to the pandemic. On a similar note, this month saw some outperformance from some of the sectors most affected by the pandemic, like leisure and hospitality or retail, essentially restaurants, hotels and stores. Overall leisure and hospitality employment, however, which stands at around 15.5 million, is still almost 9 percent short of its levels from before the pandemic.

KS: Earlier this week, we heard about the quit rate, in which 4.4 million workers left their jobs in February. Looking at those two reports together, what do they tell us?

MZ: The thing to remember about the quit rate is that it doesn’t tell us that people are leaving the labor force or leaving employment more generally, just that they’re leaving their current job. And job reports can tell us one reason why: Namely, there are a lot of jobs out there for the taking, and they pay well.

The jobs report also covers earnings, and they rose again, hitting $31.73, a 5.6 percent increase over the last year. Some of this may be coming from raises, but if the data on people leaving and starting jobs is any indication, a lot of it is also coming from job switchers getting better wages.

But in an inflationary economy, wage growth is not always what it seems. For workers, it may mean that their pay, while growing, is not keeping up the increased cost of living (which is running at about 8 percent, although the two numbers are not strictly comparable). If it accelerates too quickly, it could be yet another inflationary pressure on an already overheated economy. The Harvard economist Jason Furman, who has long been warning about the dangers of inflation, tweeted that the wage growth numbers were “consistent” with 4 percent inflation.

Two overall figures for the labor market — the labor force participation rate, which tells us how much of the population is either working or looking for a job, as well as the employment-to-population ratio, which tells us how much of the population is employed, showed solid increases.

KS: Some Wall Street analysts this week started talking about the possibility of a recession. What does this jobs report tell us — if anything — about the chances for one?

MZ: This report, which covers March, cannot tell us much about the possibility of a recession going forward. If a recession were to occur, it would be caused by some combination of inflation, interest rate hikes, high oil prices and economic fallout from the Russian invasion of Ukraine. But it would be a major reversal for an economy — and labor market — that is steadily growing, at least right now.

Thanks to Lillian Barkley for copy editing this article.

  • Matthew Zeitlin
    Matthew Zeitlin

    Domestic Economics Reporter

    Matthew Zeitlin is an economics reporter at Grid focused on the domestic impact of major stories such as coronavirus, the supply chain and economic volatility.

  • Kay Steiger
    Kay Steiger

    Managing Editor

    Kay Steiger is the managing editor at Grid.