The economy added 308,000 new jobs in March, announced the Labor Department on Friday. The strong jobs number came largely due to the service sector which added 230,000 new jobs, while the manufacturing sector continues to struggle with no net new jobs in March.

The economy added 308,000 new jobs in March, announced the Labor Department on Friday. The strong jobs number came largely due to the service sector which added 230,000 new jobs, while the manufacturing sector continues to struggle with no net new jobs in March.

This is the first time that job growth numbers have come anywhere close to the Bush administration’s July 2003 prediction of 306,000 new jobs per month – the prediction has failed miserably 8 out of the past 9 months. (See Economic Policy Institute's JobWatch for more details on the Bush administration's predictions.)

While these numbers are encouraging, it must be noted that employment is still about 2 million jobs below the peak in March 2001, and even more behind the levels needed to simply keep up with population growth. The figure below shows that employment is 6.6 million short of where the economy would have been if employment had grown at the trend rate starting from the end of the recession in November of 2001. (The trend is computed from the 10 years prior to the 2001 recession.) If we start the trend from the start of the recession in March of 2001, the economy would be short 10.2 million jobs.

Despite somewhat stronger employment numbers, the unemployment rate rose one tenth of a point to 5.7 percent. More people, however, actually started looking for jobs in March – a break in the recent trend of people leaving the job market – thus contributing to the increase in the unemployment rate.

We hope that employment and the economy will improve in the coming months and years, however, the record of the past several years remains dismal, and highlights the failure of current economic policy in creating jobs.