March Job Figures Stronger Than Anticipated
ROBERT SIEGEL, host:
Back in the news, the U.S. economy was more of lion than lamb in March. New figures out today show employers added 180,000 jobs, surpassing expectations. The unemployment rate fell to 4.4 percent and wages rose.
NPR's Chris Arnold reports all this comes as welcome news because some key parts of the economy have been shaky lately.
CHRIS ARNOLD: There was more riding on this jobs report than usual. Had it been worse than expected, it would have made a lot of people pretty nervous. Nariman Behravesh is chief economist with the forecasting firm Global Insights.
Mr. NARIMAN BEHRAVESH (Chief Economist, Global Insights): Well, I think it's clear in a lot of economists' minds that the housing recession is going to be somewhat deeper and somewhat longer than we had originally thought. But also manufacturing seems to be struggling. And the big concern has been will all of these spill over into the service sectors, which are a huge part of the U.S. economy, and would that affect service sector employment.
ARNOLD: The answer in the jobs report today was no. The past two months have seen a healthy job growth.
Mr. BEHRAVESH: The service sectors continue to generate a lot of jobs, which will make all the difference between an economy that grows, albeit weakly, and an economy that doesn't grow.
ARNOLD: In other words, an overall recession is much less likely. Wages continued to rise as well, which Behravesh says bodes well for consumer spending. On the other hand, manufacturing continued to lose jobs. So has residential construction lately, though, Behravesh says, unusually warm weather boosted the numbers a bit last month. As far as where most of the job growth is coming from, it's computer services, financial services, consultants.
Mr. BEHRAVESH: The largest gain among the major service sector category this past month was education and health services.
ARNOLD: In education, Behravesh says, many states right now have some more money to spend hiring teachers and there are all kinds of job openings in health care.
Bob Livonius is the CEO of Nursefinders, a health care staffing company that helps hospitals, clinics, and home care services find workers. His company placed 15 percent more people this year than last.
Mr. BOB LIVONIUS (Chief Executive Officer, Nursefinders): But we could have placed 50 percent more because the number of open positions that we have, that we get orders or demand for everyday, we just can't find enough of the quality professionals.
ARNOLD: Livonius says aging baby boomers are creating a greater need for health care right at the time when a lot of nurses themselves are reaching retirement age. He says many hospitals in particular are desperate to hire people.
Mr. LIVONIUS: They may not be able to take all the patients, they may discharge them to another hospital that has more nurses, or they'll use nursing assistants to try to help those nurses. But frankly it is a crisis. There are not enough nurses out there today to fill all the demands that hospitals have.
ARNOLD: Livonius says he's happy to see the increased demand pushing wages up for health care workers. He says that's been enticing more people to go to school to get training for all the various nursing, physical therapy and technician jobs. Throughout the economy, wages are rising significantly for the skilled workers who are in demand. John Silvia is chief economist for Wachovia.
Mr. JOHN SILVIA (Chief Economist, Wachovia): The unemployment rate for college-educated workers is down at 1.8 percent. It's suggesting that in those sectors we still have a shortage of educated workers.
ARNOLD: So Silvia says that's in large part why wage growth for professional services is five or six percent a year, while for manufacturing it's two and a half percent.
Mr. SILVIA: The outsize wage gains continue to reflect the returns to education in American society.
ARNOLD: Of course, wage growth will keep the Federal Reserve vigilant about inflation. Along with the job gains announced today, that makes it very unlikely the Fed will cut interest rates anytime soon. So homeowners aren't likely to get the benefit of lower mortgage rates that might result from a rate cut. They're also digging a little deeper into their wallets again for gasoline, which is getting more expensive.
Chris Arnold, NPR News.