Unemployment Rate Rises To 9.0%, But Economy Adds 244,000 Jobs
For the most part, April's jobs report was good news.
Many will concentrate on the fact that the unemployment rate increased 0.2% in April, but for the third straight month the economy showed strong jobs growth and that may be what matters the most:
The United States economy added far more jobs than expected in April, as the recovery slowly picks up steam.
The Department of Labor said Friday that 244,000 jobs were added in April after a gain of 221,000 jobs in March, as the unemployment rate rose to 9 percent in April from 8.8 percent in March.
As has been the case for several months, all of the increase came from private employers, which added another 268,000 jobs last month on top of the revised 231,000 in March, the monthly report said. Results of the previous two months were revised to show an additional 46,000 jobs were added.
Governments, struggling to balance budgets as they deal with shrinking revenues and growing deficits, cut 24,000 jobs last month. Most of the drop came on the local level, where 14,000 jobs were lost in April after a decline of 15,000 in March.
April’s numbers exceeded the forecasts of analysts, who had expected a gain of 185,000 jobs over all, with the change in private payrolls of 200,000. The uptick in the unemployment rate that came even as employers were adding jobs was an indication that more people were entering the work force as hopes for hiring increased.
About 13.7 million people were out of work in April, among them 5.8 million people who have been jobless for six months or longer. In March, the number of people who were unemployed was 13.5 million, with 6.1 million of them considered the long-term unemployed. In April, about 64.2 percent of adults were either in the work force or looking for a job, the fourth consecutive month it has been at that level, which is the lowest labor participation rate in a quarter-century.
The uptick in the unemployment rate, of course, somewhat dampens the good news of the jobs number:
The total amount of unemployed was unchanged from March at 13.7 million people.
The labor participation rate also was stuck at 64.2 percent, refuting the notion that the rise in the unemployment rate reflected more discouraged workers looking for jobs.
Also, the so-called real unemployment rate—which the government calls the U-6—which encompasses discouraged workers as well, actually rose in the month two-tenths of a point to 15.9 percent.
The numbers suggested that a good portion of the boost came from McDonald’s, which moved to hire 50,000 workers last month.
Still, gains in April marked seven straight months of net job creation, but remained too little to make much of dent on the pool of 13.7 million Americans out of work.
It’s also worth nothing that today’s report included revisions to the February and March figures which showed an additional 46,000 jobs added in that two month period.
So, there’s mixed news and that gives both sides of the political world to point to the figures as good news for them. Republicans will point to the uptick in unemployment and U-6 to argue that the Administration still isn’t creating sufficient conditions for job creation. Democrats will point to the fact that, for the third month in a row, nearly a quarter million jobs were added back into to the economy and that the recovery continues. That last part is true, but as we saw last week, that recovery appears to be very weak at the moment. Gas and oil prices have clearly had an impact on spending at all levels but, as always happens in these situations, that fact in itself is causing commodity prices to fall across the board:
Commodities prices fell sharply on Thursday, led by the steepest drop in oil prices since the fall of 2008.
Investors dumped commodities like silver and coffee and sugar that had seen a vast — and some said worrying — build up in prices within the last year on expectations of strong global demand.
The sharp sell-offs in part were prompted by fears about a slowdown in economic growth in the United States and around the world.
After four months of surging higher, oil prices plummeted by 9 percent as traders worried that American drivers were beginning to balk at paying nearly $4 a gallon of gasoline. Oil fell below $100 a barrel for the first time in two months.
“Pop goes the bubble,” said Michael Lynch, president of Strategic Energy and Economic Research , a consulting firm.
Gasoline prices have not yet declined, though experts say they have probably peaked and will begin falling in the next few days — probably in time for the Memorial Day weekend.
If this continues, then those fears of $5 or $6 gas by the summer would pretty much go away and, just maybe, the economy will have the breathing room it needs to turn this into a real recovery.