The unemployment rate dropped a notch to 8.1 percent in April, the Labor Department reported on Friday, but the pace of job growth has fallen off, amid other signs that the economic recovery may be losing momentum.
The economy added 115,000 payroll jobs last month, a meager showing compared with earlier this year when the jobs tally was rising at twice that rate and sowing optimism about the nation’s economic prospects.
Some of the most quoted figures from the jobs report suggested good news. The unemployment rate dropped to 8.1 percent in April from 8.2 percent the month before, and the number of unemployed people declined to 12.5 million from 12.7 million.
But at least part of the reason for the decline in the ranks of unemployed is that many people decided to stop looking for a job. People who have stopped looking for work are no longer counted as unemployed.
The labor force, defined as the number of people working or seeking work, declined by 342,000 in April, Labor Department said.
“The decline in the unemployment rate is principally because a lot of people gave up looking for a job in April,” said Paul Ashworth, chief U.S. economist for Capital Economics. “The economy has created so few jobs that people are disillusioned with trying to find a job and they’ve just given up.”
The number of long-term unemployed, those who’ve been out of work for 27 weeks or more, was little changed at 5.1 million in April. That group makes up more than 40 percent of the jobless rolls.
The unemployment numbers, which may be the most closely watched economics barometer to come to bear in the presidential election, were seized upon by presumptive Republican presidential nominee Mitt Romney, who called Friday’s report “terrible and very disappointing.”
Romney suggested that job growth in a recovery should be closer to 500,000 jobs a month.
“This is way, way, way off from what should happen in a normal recovery,” Romney said on Fox News. “It’s a terrible and very disappointing report this morning…. We seem to be slowing down, not speeding up. This is not progress.”
Source: Washington Post | Peter Whoriskey