While the American economy created 162,000 new jobs in March (Chart 1), the number of unemployed rose. The much lauded success of the jobs report is a paper tiger. While the creation of 162,000 jobs is better than none, it didn’t even cover the number of new people added to the workforce. The numbers of both unemployed and underemployed (people who would like to work full time but can only find part time work) increased last month (Chart 2). While politicians crowed over the increase in jobs after the report, Ben Bernanke was more measured in his reading. “We are far from out of the woods,” Bernanke said. The Federal Reserve is poised to keep rates low until jobs are being generated in sufficient numbers to bring down unemployment. But with inflation inching upwards, this strategy could take the country out of the frying pan and into the fire.
Jeremy Jones, CFA
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