April's disappointing jobs report: 6 takeaways
The unemployment rate falls to 8.1 percent, but the economy adds only a meager 115,000 jobs, fueling concerns that the recovery is stalling once again
The jobless rate in April fell to 8.1 percent, its lowest level since President Obama took office in 2009... but don't expect the White House to start whipping up champagne cocktails. The stubborn economy added a worse-than-expected 115,000 jobs last month, not nearly enough for the labor market to claw its way out of its deep hole. Indeed, many analysts now fear that we're living through a rerun of what happened to the economy in early 2010 and early 2011, when the recovery appeared to be accelerating only to stumble and lurch. Here, six takeaways from the latest jobs report:
1. Labor force participation is at a three-decade low The jobless rate fell in April because 342,000 out-of-work Americans stopped looking for work altogether; thus, the government didn't count them as being unemployed. The percentage of Americans in the workforce is now just 63.6 percent — the lowest level since December 1981, and an unmistakable signal that the job market is still in the dumps.
2. The government continues to shed jobs The public sector, forced to cut workers to close budget deficits, continues to hamper the labor market. Government employment fell by 15,000 jobs, while the private sector added 130,000.
3. Businesses are making do with less The 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," says Catherine Rampell at The New York Times. That means adaptable companies are getting more out of the workers they have, and exploiting new technologies. However, productivity actually fell slightly in April, suggesting it may no longer be tenable "to get more work out of the existing staff," says Peter Coy at Bloomberg Businessweek. If demand rises, companies could start hiring more.
4. There are still reasons for optimism… Revised data reveals that the economy created more jobs in February and March than previously thought. (February's numbers were revised from 240,000 to 259,000 and March's from 120,000 to 154,000.) That could mean that the mild winter triggered an unusual boost in off-season hiring, negating the need to find workers in spring, when economists usually expect hiring to ramp up.
5. …And plenty of reasons to worry The economy faces several obstacles that could squelch the recovery, including high gas prices, Europe's ongoing debt crisis, and slowing growth in China which could reduce demand for American goods and services.
6. The economy is still Obama's Achilles' heel The White House says the April jobs report is "further evidence that the economy is continuing to heal," but it's clear Obama will head into November with a relatively high unemployment rate. Mitt Romney, the presumptive GOP nominee, blasted Obama for his economic stewardship, saying the jobs report was "terrible and very disappointing." These numbers allow Romney "to get back on message," after being embroiled recently in arguments over Osama bin Laden and national security that don't play to his strengths, says MSNBC's First Read.