Jobs Data Point to Sluggishness
By JEFFREY SPARSHOOT And JOSH MITCHELL
WASHINGTON—U.S. job growth slowed again in April, a fresh sign that the economy could be settling into a sluggish spring.
Nonfarm payrolls grew by 115,000 last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1%.
Economists surveyed by Dow Jones Newswires expected a gain of 168,000 in payrolls and for the jobless rate to remain at 8.2% in April.
On a positive note, March payrolls grew by an upwardly revised 154,000 from an initially reported 120,000, and February payrolls posted a gain of 259,000, compared with an earlier estimate of 240,000.
Why Did the Unemployment Rate Drop?
By Phil Izzo
The U.S. unemployment rate dropped to 8.1% in April but a broader measure was unchanged at 14.5% and a separate survey noted that the economy added a paltry 115,000. Why the drop?
This month, the decline in the jobless rate wasn’t a positive sign, as it primarily came from people dropping out of the labor force. The unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force. When the unemployed no longer count as part of the labor force, both numbers decline and the unemployment rate falls.
In April, the number of unemployed dropped by 173,000, but so did the number of people employed — by 169,000. That indicates that those people didn’t necessarily find new jobs, since the overall labor force declined by 342,000.
When people leave the labor force it could be due to discouragement of the long-term unemployed or by choice over retirement or child care. The labor force has dropped dramatically over the course of recession and recovery, and concerns have been raised it was due to discouraged workers.
In both cases, more at the links.