The sudden drop in jobs added in March belies a string of recent public and private metrics that had job seekers and recruiters betting on better prospects for the unemployed.
The U.S. economy added 120,000 jobs in March, the smallest increase in five months, the Bureau of Labor Statistics reported. That's more than 80,000 fewer than most economists had predicted. While the unemployment rate fell to 8.2% from 8.3%, that was mainly because more people dropped out of the labor force. The numbers were hurt in part by a 34,000 decline in retail jobs.
"Obviously, this is a somewhat disappointing report, but the thing is we still see steady gains," said Betsey Stevenson, assistant professor of business and public policy at the Wharton school at the University of Pennsylvania. "We had months of great, great, great [numbers], with big falls in unemployment. That kind of pace wasn't sustainable."
The disappointing figures contrasted sharply with recent reports suggesting that the job market was finally improving. Payroll processor ADP Wednesday reported that the private sector added 209,000 workers in March, bringing the total jobs added since last year to 2 million.
Initial jobless claims have also declined and two recent surveys of chief financial officers showed increasing optimism. The Duke/CFO Magazine Global Outlook Survey, for instance, said that CFOs expect employment to rise by 2.1% this year, with the unemployment rate falling below 8%. Planned layoffs are also declining, according to Chicago-based outplacement firm Challenger, Gray and Christmas.
"This year will be a shade better than last year was in terms of job creation," said Mike Montgomery, an economist with IHS Global Insight. "Never, ever, ever overreact to a single months' job report."
Stevenson pointed out that, although the March numbers were lower than expected, previous months' figures were revised upward, not downward. "There's not enough evidence in this report to suggest that we aren't going in the right direction," she said. "The recovery is still on track."
In finance, where big firms such as Goldman Sachs and Morgan Stanley have been laying off large numbers, the picture brightened. The sector gained 15,000 jobs in March, more than double the number in February, the BLS reported, with the finance unemployment rate dropping to 5.1% from 7.1% in March of last year.
Not every industry or region has been seeing improvement, however, and the long-term unemployed, or those out of work for 27 weeks or more, continue to have difficulty. The lack of confidence that comes with being out of work beyond a couple months can be particularly deadly for those seeking to re-enter the work force.
"Right now, we're sort of in the 'Goldilocks of mediocrity' zone," said Montgomery. "Things are growing, but not too fast. We're kind of in the middle."
For some, including recent graduates, job prospects are better. According to an annual survey from the National Association for Colleges and Employers, companies are hiring more college graduates this spring than they anticipated last fall. While they plan to hire fewer graduates than last year, when they were refilling recession-weary ranks, employers have posted more job openings for new grads on average than they did in 2011.
Confidence among those in the trenches has also been improving. In its quarterly Employment Confidence Survey, employer-reviews website Glassdoor.com reported that 46% of employees are optimistic about the overall outlook of their companies, the highest level reported since Glassdoor began issuing the survey in 2008. The survey also found that 36% of unemployed respondents are optimistic that they'll find a new job in the next six months, up six points from the previous quarter. Consumer confidence is also at its highest level since September 2008.
Confidence drives hiring, Montgomery said. "Sales are going up -- not overwhelmingly rapidly, but companies are realizing that they can no longer get the productivity gains to sell more with the same number of people as they could two years ago," he said.
For Andrea Berkman, the market's improvement is real. A digital advertising professional who was laid off in November, Berkman recently got hired as a regional account executive with Springboard Video, a subsidiary of Evolve Media.
"There are people I know who are still looking for jobs," Berkman said. "I was looking for the right job, and I'm lucky because I found it, but it is just a function of how willing people are to bend on that wishlist of what they want to do, and how much that employer is willing to bend."
Isroel Kogan, who was laid off from his accounting job about six months ago, said that he sees a marked improvement in the hiring climate over when he was last unemployed in 2009. "There is a big difference from three years ago," Kogan said the evening before a job interview with a start-up. "I've also just gotten better at the whole process of recruiting agencies."
A deeper look at the figures, however, exposes areas of weakness. Engineering, technology and health services industries are showing the same strength they had during the recession and certain states and regions still have unemployment rates higher than the national figure.
Confidence is Important
The long-term unemployed, who represent 42.5% of unemployed persons in the U.S., continue to struggle. The average duration of unemployment fell to 39.4 weeks in March, down from a seasonally adjusted 40 weeks in February. In March of 2011, the unemployed spent an average of 39.8 weeks without a job.
While several states have proposed legislation that would make it illegal for employers to discriminate against them, reports of employers stipulating that only the "currently employed" can apply for work are frequent and are predictably discouraging for those who have been searching for an extended period.
"The work force is very damaged, and so many have been out of work so long that they've lost their confidence in themselves," said Fred Shapiro, senior employment counselor with New York City-based nonprofit Metropolitan Council. "They can't come in to interviews as a bright light, being effervescent or with confidence in themselves." For this group, however, maintaining a level of optimism is critical.
"One of the traps people fall into when they have been unemployed in the long-term is that they retreat into themselves," said Kathy Kane, senior vice president of talent management for international staffing firm Adecco. "You can get depressed about the lack of success and begin to feel like a failure."
Negativity is understandable, Kane said, but it can hurt prospects. "Companies need people who can take the bumps and bruises along the way and keep a smile on their face," she said.
Shapiro advises his unemployed or underemployed clients to try new tactics. Several of his clients have called companies they want to work for and made friends with their receptionists -- and landed $80,000-a-year jobs in recent months.
"Everybody knows that you can take 42nd street to get across town," Shapiro said, referring to the crowded and well-known New York City thoroughfare. "But only a couple of people take 43rd street -- the road less traveled -- and they get there in much less time by avoiding traffic."
Even bad markets create opportunity. "Turnover in the economy is so high that there are job openings even when on net people are losing jobs," said Montgomery. "It's not grounds for either enthusiasm or despair."
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