The April job numbers were uniformly dismal according to both the Household and Establishment Survey. 115,000 jobs were added, even less than the disappointing March numbers of 120,000 (since revised upward to 154,000), and not nearly enough to cover the rise in the civilian labor force. This led to a significant reduction in the labor participation rate, the key significant number. There is no sign of making up for the 5-7 million jobs lost in the 2008-9 recession.
While the unemployment rate dropped from 8.3% to 8.1% this was due to discouraged unemployed dropping out of the job market. In April 2.4 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. There was also 7.9 involuntary part time workers. These are people who were looking for full time work but could not find it but are not counted as unemployed.
Job creation in 2012 seems to be following the same pattern that it did in 2010 and 2011. There is a surge in job creation in the beginning of the year that peters out by the spring. According to the New York Times of May 4th, “Economists are concerned that over the coming months high gasoline prices, a euro zone recession, and slowing growth in emerging economies like China may similarly weigh on demand for products and services from American businesses, and on hiring by those businesses as well.”
Others take these trends more seriously, as a sign of permanent job stagnation. Again to quote from the New York Times of May 4th, “On Thursday, John Williams, president of the Federal Reserve Bank of San Francisco, suggested that the “natural” rate of unemployment might now be as high as 6.5 percent. Before the recession, economists generally believed it was around 5 percent.”
Despite the “cautiously optimistic” stance taken by the usual establishment economists there is nothing encouraging about the latest statistics. The major job growth has been in professional and business services while growth in the key areas of manufacturing and retail trade is anemic, Construction, government, and other key areas, which have suffered depression era losses over the past few years show no growth.