According to a report released this week, the unemployment rate in the United States fell to 4.5 percent from 4.7 percent, in February. More importantly, the broadest measure of unemployment—which is the matrix which includes those so discouraged about their prospects (or lack, thereof) they have given up looking, as well as those who are only employed part-time despite their best efforts—fell quite sharply, to 8.9 percent.
Indeed chief economist Jed Kolko puts it this way: “It’s not just that the unemployment rate was down, it was down for the right reason, which is that more people were getting back to work.”
When the US Labor Department released the report, markets opened slightly higher on Friday. Stocks began to flatten towards midday.
Now, economists had mostly expected March’s official jobs data would fall below those of both January and February as America’s unseasonably warm weather shored up several different industries. As a matter of fact, this is the second-warmest February on record, during which the construction industry added several more jobs than it had in the last decade.
In addition, the United States Department of Labor also revised its job creation estimates, the combine total falling 38,000. At the same time, America did, in fact, add 178,000 new jobs, on average, over the course of the past three months; this was far above what most economists say is necessary for keeping up with population growth.
Effectively, the average hourly earnings rose at an annual pace of roughly 2.7 percent, in March, following that 2.8 percent increase from February. Furthermore, the population ratio for prime age adults—a measure of the number of working adults are actually in the labor force—increased to 78.5 percent in this month, alone. That is the highest level for this metric since September 2008.
With a major decline in unemployment claims filed in early April, these metrics seem to be a sign of a tighter labor market: one in which many qualified people who want to work are actually able to find one. Of course, companies will have to work a little harder to find candidates to fill these positions.
LaSalle Network chief executive Tom Gimbel comments, “Companies that are growing want to hire really good people, and when you have an unemployment rate under 5 percent, there’s a shortage of them.”