Economy

U.S. Job Creation Improves in the West in March

by Dennis Jacobe, Chief Economist

Job market conditions remain best in South, less positive in East and Midwest

PRINCETON, NJ -- Gallup's Job Creation Index -- based on 16,778 U.S. employees' self-reports of hiring and firing activity at their workplaces -- shows that employees' perceptions of current job market conditions nationwide were essentially unchanged in March. Twenty-six percent report that their companies are hiring, while 24% say their companies are letting people go.

Hiring and Firing Nationwide, Monthly Averages, January 2008-March 2010

This two percentage-point difference is the same as it was in February and is consistent with the Labor Department report that the U.S. unemployment rate remained at 9.7%.in March. While conditions are much improved in the West and remain good in the South, they are less positive in the East and Midwest.

West: Shows Sharp Improvement

Hiring increased sharply in the West, to 26% during March, hitting its highest level since November 2008 -- and up from 22% in February. At the same time, firing declined to 25% -- down from 27% in February and 29% in January. Manufacturing and exports are helping, as is what appears to be a modest improvement in housing conditions in some areas.

Hiring and Firing in the West, Monthly Averages, January 2008-March 2010

South: Remains the Best Job Market

Job market conditions in the South remain the best of any region, with hiring at 28% and firing at 23% -- essentially the same as February's five-point gap. The continuation of high oil prices -- increasing even further in recent days -- benefits this region's job situation.

Hiring and Firing in the South, Monthly Averages, January 2008-March 2010

Midwest: Slight Deterioration

Hiring in the Midwest declined one point (24%) and firing increased one point (23%), reducing the hiring-firing gap to one point in March from three points in February. Improvements in the manufacturing sector have produced a relatively stable job market in the Midwest so far in 2010.

Hiring and Firing in the Midwest, Monthly Averages, January 2008-March 2010

East: Slightly Worse Than Midwest

With 25% of employers hiring and an identical percentage firing, the East has the worst job market conditions of any region, and slightly worse than those of February. While Wall Street has surged and many hedge fund managers report record earnings, job market conditions in the East have actually declined during recent months.

Hiring and Firing in the East, Monthly Averages, January 2008-March 2010

Commentary

In addition to the steady overall unemployment rate, the Labor Department reported Friday that 162,000 new jobs were created in March. Gallup's Job Creation Index suggests that the improvement in the March jobs picture probably centered in the West. It likely also reflects the continued jobs strength in the South and the fact that firing no longer exceeds hiring in any region of the country.

At the same time, Gallup's jobs data suggest that any current improvement in jobs may be somewhat illusory. Gallup analysis shows that many of the new jobs being created are not only temporary and part-time but also are being taken by many people who would like full-time work, leaving the overall underemployment rate higher in March than earlier this year.

During the next several months, the jobs data will continue to be distorted by the largest peacetime mobilization of workers in history as the government continues to hire temporary census takers. At the same time, many companies may add part-time help instead of full-time workers, hedging against both economic and political uncertainties. In order to pierce this cloud of distortion, it will be important to monitor the underemployment rate -- which together with the Job Creation Index are the best indicators of current real U.S. job conditions.

Survey Methods

For Gallup Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. The Gallup consumer spending results are based on random half-samples of approximately 1,000 national adults, aged 18 and older, each day. The Gallup Job Creation Index results are based on a random sample of approximately 500 current full- and part-time employees each day.

Regional results for March are based on Gallup Daily tracking interviews totaling more than 3,000 in each region. For each total regional sample, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

Interviews are conducted with respondents on land-line telephones and cellular phones.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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