It is no easy thing to peer through the fog of recent economic data. Confidence that the economic recovery would accelerate ran into a not-so-good job report Friday. To the chagrin of the president’s reelection campaign team, only 121,000 workers were added to private sector payrolls in March, far below expectations, and only about half the previous month’s total. The unemployment rate ticked down from 8.3 percent to 8.2 percent, but only because fewer people were seeking work. The Federal Reserve Board’s monetary policy gurus are confirmed in their view that it is too soon to tighten policy, and those who have been calling for even looser policy, a QE3, will once again raise their voices.
The unexpectedly weak jobs report caused worries to resurface that had recently been relegated to the background. Fears that the recession hitting the eurozone would have a negative impact on the U.S. economy are again on the rise, after being overlooked in the pre-jobs report euphoria. Spain’s difficulty in persuading investors to buy its latest IOUs and news that the eurozone’s problems have spread from the area’s periphery to so-called core countries such as the Netherlands and France are again prominently featured in news reports. It is clear that the austerity medicine prescribed by Dr. Angela Merkel is killing her patients, from Greece to Spain to Portugal to Italy, making at least the Greeks wonder whether they should seek a cure for their ills outside the eurozone. Should they do that, most Germans are promising to wish them a not-so-fond farewell.