In a Normal Recovery, This Would Be a Disappointing Payroll Report. But in This Recovery This Is Very Nice to See
Mark Thoma on Chris Dillow on Bordo and Meissner

Department of "Huh?!": Steady Employment Report Blogging

2.0%/year real GDP growth is roughly consistent with average payroll gains of 90,000/month. 3.0%/year real GDP growth is roughly consistent with average payroll gains of 180,000/month. 4.0%/year real GDP growth is roughly consistent with average payroll gains of 270,000/month.

Right now we have 2.0%/year real GDP growth projected for the first quarter, a lot of headwinds, and a Federal Reserve that has not extended itself via unconventional monetary policy. Why Felix Salmon is so optimistic that 2012 as a whole will see 3.5%/year real GDP growth eludes me.

Felix Salmon:

The employment recovery is real: I can’t remember the last time there was this much excitement and anticipation surrounding a payrolls number — and it’s another solid report. There were 227,000 new jobs created in March, and the already-excellent numbers from the previous two months being revised upwards: the figure for last month is now officially 284,000, a truly excellent number. The really good news here is that this isn’t even really good news, at least from a market perspective…. [T]his is looking like a real trend: the recovery in the American jobs market is going as well as anybody could reasonably expect. It’s still not enough to get the unemployment rate down to an acceptable level in the near term, of course: there’s still a jobs crisis in this country. But we’re moving in the right direction.

At this point, if we have a weak month between now and the election, it’s going to be the bad figure which looks like an aberration: only a sequence of two or three consecutive weak payrolls reports will really convince economists and the market that the recovery is going off the rails. It’s taken far too long to get here, but we’re finally moving in exactly the right direction, at an eminently healthy clip. Or, to put it another way: you can start breathing easier again, come the first Friday of the month…

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