This Really Was the Most Optimistic Jobs Report of the Entire Recovery


It's typically considered indecent wonk etiquette to get too excited about any one jobs report, for at least three reasons: (1) It's just one month; (2) The numbers will be revised; (3) They're only statistically significant plus or minus ~100,000 jobs, anyway.

With that caveat out of the way: Woo hoo, let's get excited about this jobs report!

The numbers everybody will talk about are 236,000 jobs added and 7.7 percent unemployment. But that's not why you should get excited. The first number is a pretty good number. The second number is a bad number. Unemployment is still quite high, although it's coming down slowly, by about 190,000 jobs per month over the last three months.

Before we get to the exciting stuff, here's the context: Private sector job creation emerged from its cave in early 2010 and it's been recovering fairly strongly for the last three years. State and local government austerity -- soon to be joined, perhaps, by federal government austerity -- has kept monthly job creation a little lower, around 160,000 jobs per month.

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Zooming in, you can see that this month (the far right bar) was one of the best months yet for private sector jobs, but not the best. So why do I consider this the most optimistic jobs report of the recovery?

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This is why. We added more construction jobs in February than any month since the Recession. If the numbers hold up -- big if, you might say, but I'm just going off today's stats -- it will be the single best month for construction jobs added since March of 2007 and the third best month since 2006! The housing market is sort of (fingers crossed) on a roll.

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When it comes to recoveries, not all industries are created equal. A retail recovery is nice to have, a food services recovery is nothing to sneeze at, but when housing comes back, a recovery starts to really look like a recovery.

It's happening. Even if you shake off this jobs report, the Credit Suisse monthly housing survey uncovered "unprecedented breadth of strength in both pricing and traffic at start of spring selling season." Unprecedented. Home prices rose in every city and every market, "the first time this has occurred in our survey since [the survey's] inception in 2005."

Optimism isn't mission-accomplished-ism. The labor market is still sick. Long-term unemployment is creating structural damage to the economy, and the share of Americans who are actually working is staying frustratingly low. But in the face of rising payroll taxes and ongoing foolishness in Washington, this is good news for an economy that desperately needs it.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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