
The United States had another month of disappointing job growth in April.
The nation’s employers produced a net gain of 115,000 positions, after adding 154,000 in March, the Labor Department said Friday. April’s job growth was less than economists had been predicting.
“We had a run of great numbers earlier in the year, and then we get a clear softening in the last couple of months,” said Ian Shepherdson, chief United States economist at High Frequency Economics. The slowdown, he said, could possibly be explained by unusually warm weather allowing more companies to hire earlier in the year than usual, or by higher gas prices. “If it’s the gas price effect, it ought to reverse, since wholesale gas prices dropped sharply over the last few weeks.”
American workers appear less optimistic.
The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was not because more unemployed workers found jobs; it was because workers dropped out of the labor force.
The share of working-age Americans who are in the labor force, meaning they are either working or actively looking for a job, is now at its lowest level since 1981 — when far fewer women were doing paid work. The share of men taking part in the labor force fell to 70 percent, the lowest number since the Labor Department began collecting these data in 1948.
The decline in labor force participation is partly due to baby boomers’ hitting retirement age. But economists thought the wave of retirements would be offset by the number of workers rejoining the labor force as the economy improved.
“There were a lot of younger people who had gone back to school to get more education and training, and we thought we’d see more of them joining the work force now,” said Andrew Tilton, a senior economist at Goldman Sachs. “May, June and July — the months when people are typically coming out of schooling — will be the big test.”
Shortly after the Labor Department released the April numbers, Mitt Romney, the presumptive Republican presidential nominee, argued that the lackluster report demonstrated that President Obama’s stewardship over the economy was lacking.
“We should be seeing numbers in the 500,000 jobs created per month,” Mr. Romney said. “This is way, way, way off from what should happen in a normal recovery.”
Friday’s report contained other discouraging news; the average workweek, for example, remained unchanged at 34.5 hours. A lengthening of the workweek might have suggested that employers were on the verge of hiring more employees, since they were already working their existing staff longer.
Government job losses, which totaled 15,000 in April, continued to weigh on the economy, tugging down job growth as local governments grapple with strained budgets. Private companies added 130,000 jobs, with professional and business services, retail trade, and health care doing the most hiring.
Such job growth is not nearly fast enough to recover the losses from the Great Recession and its aftermath. Today the United States economy is producing even more goods and services than it did when the recession officially began in December 2007, but with about five million fewer workers.
Because employers have learned how to make more with fewer workers, there is also debate about what exactly “healthy” employment would look like in the current economy, and whether it still makes sense to use the pre-financial-crisis economy as a benchmark for what the employment landscape should look like.
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.
Productivity fell last quarter, though, which could spell good news for the nearly 14 million idle workers sitting on the sidelines, if not necessarily for the employers trying to squeeze more profits out of their existing work forces.
In one bright spot in Friday’s report, job growth figures for March and February were revised upward, by a total of 53,000.
Economists are once again cautiously optimistic about what the next few months may bring for the nation’s unemployed, assuming the nation avoids any hugely damaging surprises.
Job growth had picked up earlier this year, just as it had at the start at the beginning of 2010 and 2011. In both of those years severe shocks to the global economy — including the Arab Spring and Japanese tsunami last year — braked some of that momentum. 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.
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