Remember the old sailing ships movies with the tall ship stuck in the doldrums and the crew all out in the long boats pulling the ship behind them in the tropical heat. Well,
sometimes these employment reports make me feel like one of those crewmen.

Yes, the employment situation has quit deteriorating, and there are encouraging details within the report. But the overall rebound in the economy and the employment situation is one of being stuck in the doldrums.

After the February snowstorms caused monthly hours worked and the index of aggregate hours worked to tick down, this month showed the expected snap back in hours worked. We are now looking at the first quarter hours worked index rising at a 1.8% annual rate, the first quarterly gain since the recession began. With continued strong productivity gains this implies that first quarter real GDP growth is almost certain to exceed consensus expectations.

However, much of the improvement in the hours worked index was offset by a drop in average hours earning.

Consequently, we are seeing a significant gain in average weekly earnings. But it is not enough to generate large gains in real income growth on the positive side, nor is it enough to scare the Fed into premature tightening on the negative side.

One of the encouraging details buried deep within the report is the large improvements in the diffusing index — another leading index of stronger employment. But we have now seen several of these leading indicators be positive for several months. It is time for them to actually lead to some strong employment numbers.