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Why the fuss about a flat jobless rate?

Answer Desk's John Schoen fielded readers’ questions in a live chat Friday about the March unemployment report. Here are some of his answers to their questions.

Answer Desk's John Schoen fielded readers’ questions in a live chat Friday about the March unemployment report. Read below for some of their questions and his answers.

Barry: Why all the exuberance over a job number that didn't even cause a blip in the unemployment rate? You would think the unemployed had hit the lottery!

The reason for the upbeat response — not sure I'd call it exuberance exactly — is that the economy is finally adding jobs. But yes, we have a long way to go to put 15 million jobless people back to work.

As for the unemployment rate, it held steady because more people came back into the official count of the size of the workforce. People who had given up looking for jobs — and aren't counted as part of the official labor force — are now encouraged about improved prospects. So when they start looking again, the workforce increases. That kept the rate flat last month.

Jean DeMange: I am an executive recruiter and we have seen a definite improvement in levels of hiring ... We are heading in the right direction — upward. It takes a long time for the normal unemployment numbers to catch up until the housing market starts back up will those numbers reduce.

We're hearing the same kind of anecdotal evidence of improvement from other sources too, Jean. Keep in mind that job growth always lags in an economic recovery. It takes awhile for businesses to feel confident enough to add workers again. The problem we face now is that the number of unemployed people — especially long-term unemployed — is extremely high. Even if we see monthly gains of 200,000 to 300,000, it will be years before it "feels" like the recession is over.

Guest: John, how much does positive news like this cause the economy and job market to feed on itself? As much as bad news?

It's certainly one of the most important reports we have to work with, and yes — good news helps build the confidence we need for business to hire again.

The hope is that as parts of the economy recovery, that momentum carries over to other industries and regions. But it will likely be a very uneven recovery for some time to come. So while things may be getting better where you live, there will be pockets of the recession lingering for some time. That's typical in any recovery.

Mike: Expectations often go unmet. Don't you think it's possible that job losses will continue?

Yes, there will certainly be more job losses. Keep in mind that this number reflects the *net* gain or loss in jobs. Every month there are hundreds of thousands of jobs lost and created. What this report says is that jobs are being created a little faster than lost.

What everyone is looking for is for this trend of net gains to be sustained. It's possible we could slip back into net job losses, but it is looking less likely. Other data seem to confirm that we're headed in the right direction.

Bob: 100,000 vs. 15 million unemployed. I don't think that's considered "encouraging" for people who have been unemployed — some for 2 years.

It's only encouraging to the degree that the numbers are finally moving in the right direction. But, as we said, we have a long road back to what most people will say feels like "normal."

Many of the jobs lost to this recession are never coming back. To get those 15 million people back to work, many of them will need training for the new jobs that are being created. These are not easy problems to fix.

But it's better to see a report with 100,000 jobs gained than 100,000 lost.

Lincoln: What sectors are seeing the most jobs growth, and where do we expect to see it moving forward?

This months report showed strong gains in government jobs — mainly because of a large number of census workers. Those jobs are temporary though.

One of the most encouraging signs was a gain in manufacturing jobs. That means that instead of just adding more overtime, employers are hiring back full-time workers.

Ron: Good to hear so many people have found jobs last month. There are still so many of us still out of work and have exhausted all our benefits, do you think the government will give another tier of benefits to help keep our heads above water? Many of us may have to go on public assistance if Congress doesn't grant a new tier of benefits.

Congress has extended benefits three times and will likely have to do so again to help long-term unemployed workers. The bills seems to get bogged down with side issues that have nothing to do with jobs.

That's created delays for people facing the expiration of benefits. It's also putting a big strain on states — whose budgets are already hurting — because the states unemployment insurance funds have been so badly stretched.

Joel: More people working is always a good thing John, but isn't one of the main issues we face is that today's wages are barely enough for people to make it month to month? I'm in Philadelphia and my small business has struggled greatly over the last three to four years, and just about everyone I speak to in every type of business has nothing but horror stories about how miserably slow every business is in this area. If people are just barely scraping by, how will discretionary spending ever return?

It's true that wages seem to have stalled — for several reasons. One is that we're all working a lot harder for the same money. That's why those productivity numbers have been through the roof for the last two quarters.

There is also some evidence that the surge in health care costs have diverted money that might otherwise have gone into your paycheck.

And yes, until we see a return to real wage gains, consumers spending will remain weak. That's not going to help the recovery.

I got laid off last Friday. Does this report tell me anything meaningful in terms of whether it is getting harder/easier for me to find a job?

The report really doesn't get into that level of detail: it's really a snapshot from 30,000 feet.

But the trend — a pickup in new jobs being created — helps you if you're looking in one of those areas showing growth. Ironically, it may also hurt you if other unemployed workers who had given up looking now dust off their resumes and start applying for those jobs. You may find more competition. But you are certainly better off if the economy is creating jobs than losing them.

Tom: I think the major issue here is that we don't make anything in America. We've outsourced all customer service and support to wherever it's cheaper. Quality is not important anymore. Everything is driven by the bottom line. Until this changes and we stop looking how to get something done as cheap as we can, I can't see an end to this. Do you ever see an end to the current trend that drives a huge gap between the upper class and the middle class?

Where to start.

The loss of jobs to other countries has certainly hurt American workers. The problem is that we haven't retrained those workers for the new jobs — many of which are better paying than the ones that were lost.

And yes, competition to provide the cheapest price to consumers has been the major driver of that move to make things where labor is cheaper. But I'm not sure consumers are willing to pay more for a product that's made in the U.S.

As for the growing wealth inequity, it's a huge problem. There are many reasons and causes, but its hard to see how we can have a vibrant economy without a strong middle class.

Have a question that you want answered? Or want to be invited over e-mail for John Schoen's next live chat? E-mail The Answer Desk at