Last Friday’s (May 4) monthly nonfarm payrolls report from the U.S. Bureau of Labor Statistics (BLS), despite showing continued job growth and a slight dip in the unemployment rate, provided plenty of fresh evidence of an anemic U.S. labor market and economy.
For the record, employers added 115,000 people to payrolls nationally in April, the fewest in six months. The increase was well below economists’ expectation of about 160,000 to 170,000 jobs and marked a substantial slowdown from March and February when 154,000 jobs and 259,000 jobs were added, respectively.
But if you look deeper, the April employment report was actually much worse than it appeared on the surface. The BLS data shows that 342,000 people left the civilian labor force last month, which means they don’t have a job, have stopped looking for work, and are not counted as unemployed in the government data. That’s the primary reason why the unemployment rate fell to 8.1 percent last month from 8.2 percent in March.
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Including population growth, the total number of Americans of working age not participating in the labor force swelled by 522,000 in April to reach 88.4 million. That’s up from 87.9 million in March and 85.7 million a year ago.
With more people abandoning the job market, the work-force participation rate slipped to a fresh 30-year low of 63.6 percent in April, down from 63.8 percent in March and 63.9 percent in February.
“In the weakest recovery since the Great Depression, more than four-fifths of the reduction in unemployment has been accomplished by a dropping adult labor force participation rate — essentially persuading adults they don’t need a job, or the job they could find is not worth having,” Peter Morici, economist and professor at the University of Maryland’s Robert H. Smith School of Business, said in a cnbc.com story.
This all points to a sickly job market that is not creating enough jobs to encourage people to look for work.
Contact Rombel at arombel@cnybj.com
