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400,000 new jobs and counting

The jobs news this morning can be summarized like this: in a welcome sign that the economy may finally be on the mend, jobs rose in March by 162K, but that was less than the 184K expected, and 48K of those jobs were new census workers; meanwhile the unemployment rate was unchanged at a very high 9.7%.

Or it could read like this: abstracting from census and other government workers, jobs rose in March for the third month in a row, as the private sector has now created a total of over 800K new jobs so far this year.

The difference between these two measures of jobs is the survey you look at. The first summary above came from the traditional survey of establishments, the second from the household survey. The latter has a good record over the years of picking up turning points in the economy ahead of the former. That's because it uses a telephone survey to get its data, whereas the establishment survey gathers data from existing businesses, and adds a guesstimate of how many new ones there might be. And as the chart shows, that makes a big difference. If the economy is turning up, the government is likely under-guesstimating the number of new businesses and new workers. (Both of the lines in the chart represent private sector workers only.)

But let's assume that even the household survey can have random blips, such as the 500K drop in private sector jobs in December, and the 550K jump in January. A conservative reading of the numbers would therefore conclude that new private sector jobs have increased by 400K so far this year, with 300K of those new jobs created in March alone. Any way you look at it, though, the number of jobs is clearly on the rise, so the outlook is likely to improve in the months to come.

The economy is now growing, and it's for real.

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