Doubts about the economic recovery

What happened

The U.S. jobs market appears to be slowing its stride, raising fears this week that a nascent economic recovery is losing momentum. Employers added just 120,000 jobs in March, according to the Labor Department, well below economists’ expectations and less than half the average 246,000 new jobs added in each of the previous three months. In a reversal of recent trends, retailers shed nearly 34,000 jobs, construction lost 7,000, and temp work fell by 7,500. But manufacturing continued a robust run, adding 37,000 jobs, and analysts were heartened by the fact that government employment fell by only 1,000 workers, suggesting that public-sector cuts are easing. The unemployment rate fell slightly, from 8.3 to 8.2 percent, but the decline came largely as a result of people leaving the workforce.

Both political parties attempted to spin the mixed report to their advantage. A cautiously upbeat President Obama noted that the economy has still added more than 600,000 jobs since Jan. 1. “There will still be ups and downs along the way,” he said. “We’ve got a lot more work to do.” Republicans argued that the latest figures highlight the failure of Obama’s economic policies. Presumptive GOP presidential nominee Mitt Romney called March’s jobs gain “weak and very troubling,” and said the president’s “excuses have run out.”

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What the editorials said

Just like last year, a winter recovery appears to be turning into a spring stall, said The Wall Street Journal. Workers continue to abandon the labor force in droves, and any gains we saw in recent months were probably the result of the warmer-than-usual winter giving the construction industry a head start on spring. The economy’s continued fragility is all the more astonishing given the “three years of unprecedented fiscal and monetary stimulus” President Obama has thrown at it, including a $100 billion payroll tax holiday this year.

To be fair, the economy is still headed in the right direction, said Bloomberg.com. But the recovery is not so strong that the country’s politicians couldn’t still “kill it off.” The expiration of the Bush tax cuts and the start of $1.2 trillion in spending cuts at the end of 2012 could trigger a renewed recession that might “permanently stunt the economy’s growth.” President Obama and Congress should take this disappointing report as a warning that the economy cannot withstand either tax increases or major cuts in spending.

What the columnists said

One bad report does not a trend make, said Felix Salmon in Reuters.com. The March jobs figures are likely to be revised upward when more complete data become available. And even if 120,000 new jobs disappoints today, it’s worth recalling that not long ago, this figure would have been “taken as something decidedly encouraging.” It’s not encouraging that more people have given up looking for work, said Matthew O’Brien in TheAtlantic.com, but it isn’t necessarily proof that the economy is slumping again. More baby boomers in their late 50s and early 60s are reacting to hard times by retiring early, while young people are stalling by going to graduate school.

Still, there’s plenty of reason for concern, said Robert Reich in CSMonitor.com. Employers won’t continue to hire unless consumer spending justifies it. With most gains going to the top 1 percent, and personal income stagnating, “consumers’ pockets are almost empty.” Expect “an anemic jobs recovery” in the months ahead. That’s hardly what Obama wants to hear, said James Politi in the Financial Times. The president was hoping to kick off the two-man general election with strong economic data at his back. Any overconfidence at campaign headquarters has now “been wiped out.”

In fact, said John Podhoretz in the New York Post, the “dynamics of the presidential race” just shifted. The president acknowledged his acute vulnerability by saying that we should expect continued “ups and downs” in coming months. But a real recovery “is ups without downs.” No matter how Obama and his team spin the numbers, he’ll be in big trouble this November if he faces the voters “with an economy little better than it is now.”