5 Cautionary Signs In April’s US Jobs Report

In this April 10, 2014, photo, a sign points to a job fair on the campus of Kaplan University in Lincoln, Neb. At first glance, April's U.S. employment report suggested that the agonizingly slow 5½-year-old economi... In this April 10, 2014, photo, a sign points to a job fair on the campus of Kaplan University in Lincoln, Neb. At first glance, April's U.S. employment report suggested that the agonizingly slow 5½-year-old economic recovery has gained new momentum. Yet several cautionary signs emerged from the report. (AP Photo/Nati Harnik) MORE LESS
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WASHINGTON (AP) — Employers added a sizable 288,000 jobs in April.

Hiring in February and March was better than first thought.

The unemployment rate plunged to 6.3 percent from 6.7 percent.

At first glance, Friday’s U.S. jobs report suggested that the agonizingly slow 5-year-old economic recovery had burst into a full sprint.

Yet several cautionary signs emerged from the report, starting with that spectacular plunge in the unemployment rate.

Here’s why: The government uses two surveys for the jobs report. The job gain comes from a survey of businesses, the unemployment rate from a survey of households. Sometimes, the two conflict.

The survey of businesses showed 288,000 more jobs. Yet the household survey, in calculating unemployment, found that 73,000 fewer people had jobs.

Why did the unemployment rate sink? Because 806,000 fewer people were in the workforce. Many retired or ended their job hunts. And fewer-than-expected people began looking for work.

The unemployment rate typically drops when fewer people seek work: If they’re not hunting for a job, they’re not counted as unemployed.

All of which points to an underlying weakness in an otherwise improving job market.

“When you have a robust economy, you don’t get these mixed messages,” said Douglas Holtz-Eakin, a former head of the Congressional Budget Office and now president of the conservative American Action Forum.

Here are five cautionary signs from April’s jobs report:

543,000 FEWER PEOPLE SEEKING WORK

Let’s dive a bit deeper into that unemployment rate. People flow into and out of the job market each month. Some leave for school; others return, armed with a degree. Some quit to raise a family. Some apply for jobs after their kids start kindergarten. In April, the number of people who began looking for work fell off a statistical cliff.

This suggests that the recovery lacks the kind of gravitational force needed to draw more workers back into the fold. Just 58.9 percent of the working-age population holds a job. That’s down from 62.9 percent before the recession began at the end of 2007.

“We do not yet have a jobs recovery that is strong enough to really pull people in,” said Heidi Shierholz, an economist at the progressive Economic Policy Institute.

The number of people who began seeking work for the first time fell 126,000 from March to roughly 1 million. The figure for new grads and parents who began looking was even bleaker: Down 417,000 to 2.6 million.

If those 543,000 people combined had all started looking for work in April, the unemployment rate would be 6.6 percent — a dip from March’s 6.7 percent, rather than the plunge to 6.3 percent.

NO HOUSING REBOUND

Builders added 32,000 workers in April. But just 41 percent of them were for constructing homes. That share is usually around 50 percent. The lower figure likely reflects how much housing has cooled this year after a solid improvement in 2013. Sales of new homes plunged 14.5 percent last month, according to the Commerce Department.

Friday’s report suggested that homebuilding could remain sluggish.

“You see that in the hiring numbers,” said Steve Blitz, chief economist at ITG Investment Research. “You see it in the borrowing numbers. And you see it in the value of private construction put in place.”

HIGH SCHOOL GRADS AND DROPUTS LOSING OUT

People who’ve never been to college — about a third of workers older than 25 — are struggling. More than 200,000 high school drop-outs lost jobs last month. So did 276,000 high school graduates. This group isn’t sharing in a recovery in which college has become practically a pre-requisite. Only 54.3 percent of high school grads either have a job or are looking for one. That’s down from roughly 60 percent before the recession.

FLAT WAGES

Average weekly paychecks didn’t budge in April. They were $838.70, exactly as in March. Stagnant pay could slow growth, since about 70 percent of economic activity comes from consumers. They can’t ramp up spending unless their wages rise. “Firms are hiring again, but we still need wages to rise faster if the economy is to really accelerate,” said Joel Naroff, president of Naroff Economics.

45,000 MORE MEN WORKING TWO FULL-TIME JOBS

Imagine juggling two-full time jobs. About 198,000 men managed this balancing act last month — a sharp increase of 45,000 year-over-year. True, that’s a small share of the 145.7 million working Americans. But it reveals something critical in an economy in which several million Americans can’t land one job, let alone two.

The number of Americans with two full-time jobs usually rises when times are flush and reliable employees are hard to find. That’s not true now. Nearly 3.5 million people have been jobless for more than six months. When people take a second job, they do benefit financially as individuals. Yet it means someone else is stuck on the unemployment rolls without any job. The trend suggests that many employers are writing off some of the unemployed in favor of those already holding a job.

“That’s 45,000 other people who didn’t get a job,” said Shierholz of the Economic Policy Institute.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Notable Replies

  1. Another thing employers don’t want to pay for is experience. I live with a couple of long-term unemployed people, my former neighbors, who have failed to find employment. It’s not that there are no jobs, it’s just that people don’t want to pay a paramedic with 14 years experience or a retail manager with 10 years experience. I myself work but I am paid about $12,000 less than the average wage for the area in my field. It isn’t easy out here for anyone. We are part of the most productive workforce in the history of the world, but that isn’t important, apparently. What appears to be important are the wealthy sonsofbitches being the most wealthy minority in the history of the world, and all the social obligations that usually go with great wealth being forgotten or trampled on. Meanwhile, I think about the lives my roommate could have saved with her experience. There are several areas that should not be for profit. Healthcare is one, and public utilities like water and heat should be others.
    We deserve better treatment from our employers as well as our government. My roommates feel lucky I took them in right before their unemployment cut off suddenly, because I’d never turn them out in the middle of winter. I wonder what happened to all the others.
    As far as I am concerned the GOP Congress is guilty of murder for letting aid to these people expire when and how it did. They should be held to account.

  2. I’ve said it over and over again. These
    statistics are a game of three card
    monte, and it isn’t the people in trouble
    holding the cards.If everyday people
    understood (which is to say that if the
    “News Media” had enough courage to
    honestly report the depths of the
    statistics and their genuine effects)
    there would be nothing short of a
    national emergency, because people
    would demand nothing less than that.
    The Congress would be utterly and
    absolutely compelled to agree to and
    apply solutions. That would
    destroy both the Grumpy Old Party’s
    obstructionism, and the Doormat Party’s
    excuse for what amounts to a four year
    “Pity party” over what the people
    have allowed their “Government” to
    become.
    Meanwhile, the people who suffer
    the most (the 99-ers and the 199-ers)
    are the ones who get nothing,
    and who can give no more, because
    it’s all been ground out of them.
    But “Government” can report, and
    political parties can regurgitate the nice,
    “clean” stat that “Unemployment” has
    gone down three tenths (0.3) of one
    percent, and that’s all people “absorb.”
    That is, unless you happen to be an
    inner city teenager, Black, Latino,Latina, or female in general, , and or female in general. If you’re not
    one or more of these, life is all of a
    sudden turning up roses. Otherwise,
    it’s another kind of brown sandwich,
    and No, I don’t mean peanut butter.

  3. Re: 800K leaving the work force - last month a net 500K supposedly joined the workforce. I’m guessing neither number was particularly accurate, and the 800K was a sort-of ‘revision’ of the 500k.

  4. Boy, you just described me to a “t”. I’m part of the long-term unemployed and at the age of 51, my experience is now a liability. The mid-level jobs are either gone or taken by those who have no intention of ever leaving. No one wants to see me for a low-level job because - well, it’s pretty obvious.

    There was a time when large, multinational corps. would hire people. Now, the ultra wealthy CEO’s have taken the salaries that formerly were being paid out to experienced employees for themselves.

  5. I wish to echo the first two posters. And add one other thing. And I have said this before:

    If the United States were a country in which. let’s say, 99% of the population were

    (a) the same “race”
    (b) the same ethnic group
    © the same religion
    (d) the same strengths of stances on “wedge issues” across the
    spectrum

    There would be a near-zero probability that what is taking place would occur. After all, why would 99% of the population choose to harm themselves and their society so as to further enrich 1% (or less) of the country? And to go a bit further, why would this society exist such that 99% of near-desperately needy people IDENTIFY with less than 1%? My wife and I were in my doctor’s office last week and we browsed through a magazine targeted to the 1%–with advertisements and merchandise few people can even be in a position to CHECK OUT, let alone BUY. Why would 99% of of a society masochistically thumb through these pages?

    FOX, Talk Radio, a highly sophisticated GOP messaging system and the corporatized, compliant remnants of the Fourth Estate have converted the segments of the population who vote the most consistently and aggressively into, literally, GOP-voting foot soldiers, who are underwriting what Piketty and others have observed as an accelerating “race to the bottom” on social inequality.

    It is one thing to operate a Soviet-style regime in which there is concentration of power, oppression and absense of legitimate representation for the majority of its citizens–bulwarked by aggressive (top-down) police-state oppression.

    It is quite another to subvert an entire Constitution-based representative government such that a significant minority of the population (consisting of bigots, haters, militiamen, xenophobes, misogynists, religious zealots and neo-Confederates) has achieved and will achieve similar results. The motivation for these highly motivated individuals?

    The fact that the US is not

    (a) the same “race”
    (b) the same ethnic group
    © the same religion
    (d) the same strength of beliefs across the spectrum


    Obviously the Plan is working. People are talking about a GOP takeover of Congress in 2014. Think of that. A Party consistently on the wrong side of every social and political metric imaginable (except the metric of getting Old People to the polls) is going to be in control of the Legislative Branch of the Government of the United States of America.

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