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CNN Financial News Producer
At long last, we received a solid indication today that we’ve turned a corner. The economy had its biggest jump in jobs in three years last month.
The Labor Dept. said the economy gained 162,000 jobs in March, compared to a revised reading of a loss of 14,000 jobs in February. That makes March only the third month since the start of 2008 that employers did not cut payrolls.
But while the news was positive, there were a number of short-term factors that inflated the reading, including an addition of 48,000 by the Census Bureau. March's figure was also given a boost by seasonal factors. For example, February's numbers were dragged lower by temporary job losses related to the string of severe winter storms that crippled much of the Northeast.
The unemployment rate, meanwhile, held steady 9.7% last month.
But if 162,000 jobs were created last month, why did the unemployment rate stay the same?
In short, the payroll number and the unemployment number are based on separate surveys. The payroll number comes from a survey of employers, while the unemployment rate is compiled from a survey of households: different groups, different surveys and typically slightly different results.
Also remember that unemployment rate is based on the percentage of people who are considered to be “in the workforce,” even though they’re looking for jobs. And as the recession wore on, many gave up looking altogether and were dropped from the tally.
Finally, because of population growth, there are always new people entering the workforce. Economists say it takes somewhere around 100,000 to 150,000 new jobs each month just to keep pace with that population growth and keep the unemployment rate from rising.
So where did the jobs come from? Temporary help jobs have been a big force in the gradual comeback. They accounted for about 40,000 positions last month. The health care sector added a similar amount as doctors, nurses and other medical professions have remained mostly unscathed during the recession.
But even the construction and manufacturing added jobs - two sectors that alone accounted for millions of the job losses over the last few years.
Bottom line: after watching jobs losses tick as high as 8.2 million since the start of 2008, it’s nice to be going in the opposite direction for a change.
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