A Jobless Recovery?

After all our worrying, we lost some construction jobs.

That’s the upshot of the latest employment report. The economy lost 36 thousand jobs, but net of construction we gained 28 thousand. That’s actually pretty positive, given February’s stormy history. Hours worked declined, but only modestly. In sum, the employment report was a jobs gain in all but headline.

That doesn’t mean that the economy is out of the woods. We’ll only gain a nominal number of jobs starting this spring, and we need a lot more than that to absorb the millions of workers this recession has displaced. Most of the jobs gained since the recession ended have been temporary positions. Eventually, those jobs need to either become full-time or get eliminated.

Still, it’s a lot better looking at modest gains than the 700 thousand jobs lost per month a year ago. The economy has improved, but jobs in homebuilding, mortgage finance, and related positions aren’t coming back any time soon. The mal-investment of the boom has created an oversupply bust that we just have to work out of.

It’s no fun, but we’ll work our way out of this funk, too. As Pasteur said, “Chance favors the prepared mind.”

Douglas R. Tengdin, CFA
Chief Investment Officer
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