“This was a very disappointing report [with nonfarm payrolls rising only 88,000], and the employment report is probably the most single important piece of news we have on the overall U.S. economy,” Schnure said.
But Schnure continued that most other indicators are at odds with the weak message in the headlines. “The average work week increased a tenth of an hour and the index of total hours worked rose three-tenths of a percent. That’s a fairly robust number. This is not consistent with employers cutting back,” he said.
“Initial jobless claims continue to move down. There’s no sign that employers are laying off, [and] February job openings rose to the highest they have been since early 2008. So, we don’t see signs that the overall economy suddenly fell off of a cliff.”
Schnure said one possible explanation for the mixed messages in the jobs report is a decline in the number of people who would like to work full-time but are working part-time. Part-time employment fell sharply in March, Schnure noted, which indicates the increase in full-time jobs was significantly larger than suggested by the headline number.
Schnure noted than many economists have focused on the negative impact of the sequester and payroll tax increase on GDP growth relative to baseline.
“What you need to keep in mind is that the baseline has kept moving up. It’s moved up more than a half of percentage point, so I actually expect the economy to grow stronger in the second half of the year,” he said.
Additionally, Schnure said the commercial real estate recovery is “on track, and we’re likely to see some strength later on.”