Labor Department data released Friday suggest the economy is still expanding steadily, though slowly:
The nation added 165,000 jobs in April as the unemployment rate fell to 7.5 percent, from 7.6 percent in March, the Labor Department said on Friday. The news was particularly welcome after a mere 88,000 jobs were initially reported to have been added in March; the new report revised that estimate to a healthier 138,000, suggesting that the labor market isn’t slumping as much as it had appeared. . .
Many of the details of the new report also point to a steady job market: The drop in the unemployment rate, for example, was driven by more people finding jobs, not by people leaving the labor force. Some 293,000 more people described themselves as employed in a survey of households, and 93,000 fewer said they were looking for a job but couldn’t find one. The ratio of the population with a job ticked up to 58.6 percent, from 58.5 percent. And the number of long-term unemployed, those out of work and looking for a job for more than 27 weeks, fell by 258,000. (Read the full article here.)
Another report from the National Federation of Independent Businesses indicates that small businesses added modestly to overall employment, writes The Washington Post’s J.D. Harrison:
During the month, roughly the same number of employers (13 percent) cut jobs and added jobs, though collectively, the latter group added more positions that the downsizers lost—thus the slight overall increase in small business employment.
The Post’s Neil Irwin writes that employment has risen slowly but predictably for several years:
Any attempt to divine a meaningful change in the pace of the expansion has turned out to be wrong. There have been no double dips into recession, despite a clockwork-like speculation that there will be whenever a couple of months of soft data come out. There has been no speedup into a full-throated growth that would bring us back to a strong economy.
In April, the United States added 165,000 jobs. Over the last 12 months, it has averaged 168,000 a month. Over the last 24 months, it has averaged 184,000. Over the last 36 months, it has averaged 162,000. For three years straight, any variation from the basic trend has been offset by a variation in the other direction in the following months. (Continue reading at Wonkblog.)
Research by economists Martha Olney and Aaron Pacitti suggests that because the national economy relies on a larger service sector than it did in past decades, recoveries from recessions will be slower, The Post’s Jim Tankersley reports:
There comes a point, after an economy has been contracting, when factory owners start to anticipate that better times are around the corner. So they ramp up output — which puts people back to work, pumps more money into the economy and ends up creating a virtuous cycle of output, employment and growth.
It’s a different story for service providers. They don’t anticipate new demand -- they wait for it to appear and then hire workers to handle it. Think of an ice cream shop owner: “They don’t want to scoop the ice cream and leave it there, hoping that you’ll walk in the door,” Olney said in an interview. “If you don’t walk in the door, it will melt.”
Manufacturers don’t run the same risk, Pacitti explained. “Microwaves don’t melt on the store shelf.” (Read the rest of the article here.)
Post opinion writer Ed Rogers blames President Obama and the Federal Reserve’s policies for a recovery that has benefited investors but not workers. Opinion writer Greg Sargent, on the other hand, attributes mediocre employment to misplaced priorities in Congress. For a visual representation of the most recent data, read more at Wonkblog.