Job Growth Stronger than Expected

Nonetheless, unemployment creeps higher as more Americans return to the workforce.
Stephen TaubApril 5, 2004

Unexpected good news on the jobs front: Non-farm payrolls climbed 308,000 in March, the strongest month since April 2000. Job growth increased across all sectors, with construction and retail sales seeing the largest gains, according to the government report.

The March expansion was about triple the 103,000 increase that Wall Street pros were anticipating, though it was aided by a number of one-time events, noted The New York Times. Those events included the return of better weather after a frigid February, which contributed to 71,000 new construction jobs, and the return of workers after a labor dispute at California grocery stores, which contributed to 47,000 new retail jobs.

The economy has now created jobs during each of the last seven months. The Department of Labor also revised upward its payroll numbers for January to 46,000, and for February to 159,000 — nearly double its previous figures for the two months.

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The unemployment rate rose to 5.7 percent from 5.6 percent, however, because more people returned to the labor market to look for jobs. That rate — which is measured through a household survey and not company payrolls, noted the Times — recorded a decline of 304,000 in the self-employed for a net decline of 3,000 jobs.

The unexpected surge in new jobs is good news for President Bush, who has been criticized for the loss of 1.8 million jobs since he came into office. It’s bad news for the Treasury market, which plunged on investor concerns that the Federal Reserve would soon raise interest rates from their 45-year low.

Reuters also reported that the Labor Department, the Securities and Exchange Commission, and the Commodity Futures Trading Commission are investigating a possible leak of the employment data. The Labor Department does not believe that a leak occurred, according to Reuters, but that it is looking into “unusually large price movements in financial markets” that began about two minutes before the release of the closely watched jobs report.