Nearly 500,000 people quit looking for work in March, bring the percentage of Americans participating in the labor market to the lowest level since 1979.
In a hideous monthly labor report, that single data point may be the worst of the lot. Then again there's a lot of competition for that dubious honor. Construction employment growth slowed and retail jobs gave back all of the 25,000 gained in February, suggesting the consumer is staying home rather than going out and spending money.
The data was a gut punch for the bulls, but Jim Paulsen, chief investment strategist at Wells Capital Management, says it wasn't as horrible as the stock market reaction would lead you to believe. "It certainly was a miss," concedes Paulsen in the attached clip. "But I do think there are some decent things in the report." Here's what he likes:
* The economy created 88,000 jobs in March but 61,000 jobs were added to prior data via revisions. That puts the total number at 150,000, still shy of expectations, but better than the headline suggests
* The monthly data is volatile but 500,000 jobs were created in the first quarter, which is "not a disaster," says Paulsen.
* Average workweek climbed in March
* Temporary jobs, considered a precursor to future employment, went higher
Beyond that even a optimist like Paulsen runs out of positives. "I'm not going to paint it over, it's a disappointing report and it's going to have an impact on the financial markets." The question is how big an impact it will be. Paulsen isn't just whistling past the graveyard in terms of one month worth of data being the end of the world.
If you clear away the disappointment, the economy is pretty much right where we left it yesterday. There is a painfully slow recovery and the Fed is going full-bore on stimulus. One month doesn't make a trend, even if the headlines are as ugly as the ones we saw this morning. Of course that's unlikely to be of much solace to the half-million Americans who quit even trying to find jobs last month.