There is finally some good news on the employment front. Data from the Labor Department showed that payrolls rose steeply in March, the third increase in the last five months.
Data showed that Payrolls rose by 162,000 last month as the economy recovery picked up pace and employers showed more confidence. This is the largest increase in payrolls since March 2007, and the report was welcomed by President Obama, who said it was the best news in the last two years.
Although most economists confirmed that the rise in payrolls was clear evidence that the economy was improving, they pointed out that the extent of increase in jobs was exaggerated because of a few factors.
The largest factor that boosted the number was that the government added 48,000 temporary workers to carry out the census. Almost 30% of the rise in payrolls came because of this hiring alone. Another important factor was that many businesses were closed in February because of bad weather. This means that any hiring that would have taken place in February was reflected in the March numbers, thus giving them an artificial boost.
Nevertheless, there is consensus among experts that hiring will pick up in the next few months and the worst is over for the job market. The Treasury Secretary, Timothy Geithner, agreed that the economy was recovering rapidly. But he added that there was still a lot of work to be done to deal with the havoc caused by the recession.
The major sectors that contributed to growth in employment were manufacturing, construction, health care, transportation, warehousing, and social services. Construction companies were worst hit because of bad weather, and resumption of activity in the sector is reflected in the job figures. Health care and social services sectors added about 37,000 jobs, while transportation and warehousing contributed another 8000 jobs.
Data also showed that the percentage of temporary workers in the overall work force went down, which means that companies are now more optimistic and are comfortable in hiring permanent workers. This is in stark contrast to the situation only a few months ago when most companies preferred hiring temporary workers, as they were not sure how sustainable the economic recovery will be.
Although the rise in payrolls had hardly any impact on the unemployment rate, which stayed firm at 9.7%, it is still quite significant as it is seen as the turning point for the job market.