RENEE MONTAGNE, host:
Now, for some economic news. The government's monthly jobs report is out this morning. And in March, hiring was better than expected. The unemployment rate dropped to 8.8 percent. NPR's Tamara Keith is here to break these numbers down. And Tamara, good morning.
TAMARA KEITH: Good morning.
MONTAGNE: This is the fourth month in a row, that the unemployment rate has fallen. So, what is happening here?
KEITH: Well, in short, people are getting jobs. This is the lowest the unemployment rate has been in two years. And by another measure of the labor market, payrolls grew by 116,000. So, employers are hiring at an increasing clip, and actually, this marks more than a year that the private sector has been producing jobs, month after month.
I spoke with John Sylvia a few minutes ago. He's chief economist at Wells Fargo.
Mr. JOHN SYLVIA: It's given you pretty much exactly what you expect. There are job gains in the service sector, there are job gains in the manufacturing sector. The job losses are primarily in government, especially state and local government. That's consistent with what you would expect.
KEITH: Yeah, because we've been seeing public sector job losses for months now, as stimulus spending has gone away, but the private sector is more than making up for it. In March, private payrolls grew by 230,000. But, then again, we have 13.5 million people out of work and still searching.
MONTAGNE: And what can you tell us about those people, the unemployed?
KEITH: A lot of them have been out of work for a very long time. And there's a pretty stark number in this report. The average duration of unemployment for those who are out of work, rose to 39 weeks in March. That's nearly 10 months, and that's just the average.
I checked the statistics, going back to 1948 - which is as far back as the government data go - and this is the worst it's ever been. The thing is, the longer someone is out of work, the harder it is for them to get back in. Their skills atrophy, employers aren't interested in talking to people who have a huge gap in their resume. And then when these folks do find jobs, it's often at a salary that is significantly lower than what they made before.
MONTAGNE: About salaries, this report also includes information about average earnings. And what does it say about that?
KEITH: Well, they stayed the same, actually; in March, average private sector earnings didn't budge. In the past year, hourly earning have risen by a little bit less than two percent. And you could say, you know, this is a relatively low inflation environment - hey, that seems like a decent wage increase. But anyone who has filled up their tank, recently, knows that at least one aspect of the cost of living is on the rise. That's gas prices.
In the same period that wages rose just slightly, the average cost of a gallon of gas has risen nearly a dollar. So, fill up the tank twice a month and those wage gains are basically gone. But John Sylvia says don't get so doomy and gloomy here, we actually have employers hiring again and the unemployment rate is improving. And all of this is a reflection of an economy that's in recovery.
Mr. SYLVIA: You've got a good economic report. It just seems to tell us exactly where we are and is consistent with the other data, and we're moving forward. So, get on the bandwagon.
KEITH: Get on the bandwagon, he says. He and a lot of other economists are saying, the jobs drought is over.
MONTAGNE: Of course, it's not as if the reservoir is full. How long are they saying it will take to get from 8.8 percent unemployment to something that's more healthy?
KEITH: Years. When the recession started, back at the end of 2007, the unemployment was 4.9 percent, which at this point, seems pretty quaint. At the pace we're going, which is a decent clip but not great, it will be a very, very long time until we get back to that.
MONTAGNE: Tamara, thanks very much.
KEITH: Thank you.
MONTAGNE: NPR's Tamara Keith. Transcript provided by NPR, Copyright NPR.
MONTAGNE: You're listening to MORNING EDITION from NPR News.
