Peter Morici

The economy created 192,000 jobs in March, down from 197,000 in February, and still well below the pace needed to lower underemployment to respectable levels. Those mediocre results are consistent with a broadly underperforming economy.

Manufacturing employment lost 1,000 jobs, and government stalled. Other than construction, which gained 19,000 employees, most new positions were in lower paying activities like leisure and hospitality, support activities in health care, retail, and temporary business services.

Hourly earnings fell, indicating good jobs continue to be scarce.

In 2013, GDP growth was only 1.9 percent, thanks to the $200 billion January tax increase and federal spending cuts, but after a slow first quarter, most economists expect the pace to accelerate to 3 percent by the second half of this year.

Improved prospects are raising home values and President Obama is not likely to get from Congress the higher taxes in his budget proposal. Jobs creation is likely to be in the range of 200,000 per month; however, should the president get the higher taxes he wants, the situation would worsen.

Global growth is rebalancing from Asia to the Atlantic community, as Europe shakes off the worst of its sovereign and bank debt problems, and this will reduce vulnerabilities to dodgy financial practices and economic nationalism in places like China, Japan and Latin America.

Though the shenanigans on Wall Street—ranging from high-speed traders stealing from ordinary investors to the endless imagination of the casino gamblers at the big banks—continue to threaten financial stability, the Federal Reserve and other U.S. regulatory agencies are proving more diligent than during the Bush years.

This spring more robust household formation should push housing starts above 1 million this year for the first time since 2007. The burdens of student debt require that many new dwellings be apartments, but surging residential construction will boost sales of pickup trucks so ubiquitous on construction sites, and employment in industries supporting housing and motor vehicles.

In February, unemployment was steady at 6.7 percent, and the percentage of adults employed or seeking a job—the so-called participation rate—rose slightly but remains well below pre-recession levels.

Peter Morici

Professor Peter Morici is a recognized expert on economic policy and international economics. He has lectured and offered executive programs at more than 100 institutions including Columbia University, the Harvard Business School and Oxford University.