U.S. job growth increased at its fastest pace in more than two years in April, and the unemployment rate dived to a five-and-a-half year low of 6.3 percent, the Labor Department said Friday in its latest monthly report, suggesting a sharp rebound in economic activity.
The new jobs report, which was more positive than many analysts expected, showed that the United States may finally be close to recovering from the 2008 global financial crisis. But the report also contained some potentially troubling figures that suggest that the lower unemployment rate may be partly due to more people’s having given up looking for work and that low-wage and temporary jobs may be the U.S.’s new economic normal.
The report showed that in April the U.S. added 288,000 new jobs, nearly all of which were in the private sector. About 203,000 of those jobs were full time. The Labor Department revised up the two previous months’ numbers by 36,000 combined, a potential sign that job gains are part of a positive trend and not just a one-month anomaly. The revised numbers brought the three-month average to 214,000 new jobs.
The gains put the active U.S. labor market at just 120,000 jobs below where it was before the Great Recession, leading some economists to say the latest report is proof that the economic recovery is in full swing.
But that’s where the positive news in the report ended.
Jobs have been added, but because of population growth, the percentage of Americans working has remained virtually unchanged since 2008. While the unemployment rate fell to 6.3 percent from 6.7 percent — the biggest drop since 2008 — some say that may just mean more people have quit looking for work. A whopping 806,000 stopped actively searching for jobs last month, according to the report. That dragged the labor force participation rate down to 62.8 percent, matching December’s number. Before December, the labor force participation rate hadn’t dipped so low since the late 1970s.
“That brings into question the long-term capacity of the economy for growth,” said Sherle Schwenniger, director of the Economic Growth Program at the New America Foundation.
SOURCE: Peter Moskowitz