Behind the Dismal Jobs Numbers: The 'New' Economy Takes Shape

It is amazing just how wrong economists were in their predictions for the number of jobs that were to be created in March. The "consensus" figure was 200,000 -- a far cry from the actual number created which was 88,000. Totally "unexpected," as usual.

In one way, you can't blame them. After a better than average gain in February of 236,000 (revised upward this month to 268,000), along with some positive numbers in housing and consumer spending, there were no doubt many analysts who began breathing a sigh of relief and believing that the long-awaited jobs recovery was upon us.

According to the New York Times, the experts didn't account for a few realities that are beginning to shape our "new" economy:

“It’s important to look at the types of jobs that are being created because those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery,” said Sarah Bloom Raskin, a member of the Federal Reserve Board, in a recent speech. [...]

Ms. Raskin also expressed concern about temporary-help jobs, which account for a growing share of total employment.

Usually an increase in temp hiring is considered a good thing, at least at the start of a recovery, since it indicates that employers are thinking about taking on permanent workers. So far, though, employers seem to be sticking with those temporary contracts.

“Temporary help is rapidly approaching a new record,” said Diane Swonk, chief economist at Mesirow Financial, who noted that there was also a rapid increase in temp hiring during the boom years of the ‘90s. “That of course means more flexibility for employers, and less job security for workers.”

Perhaps most distressingly, millions of workers who want full-time work still can find only part-time work, and their missing work hours do not count toward the official unemployment rate.

Nearly 10% of the workforce is what the BLS calls "employed part-time for economic reasons." That is to say, either their hours were cut or they were forced into part-time work because they couldn't find full-time employment. According to Gallup, the percentage of part-time workers who want full time work but can't find any is the same as it was in March, 2012. There are about 3 million temporary workers who also are not counted as unemployed.