The U.S. economy added an impressive 288,000 jobs in April, continuing a streak of what’s now six straight months of the economy’s adding more than 200,000 jobs. The past six months have in fact been essentially the fastest half-year since the recovery (such as it is) began: Job growth over the past three months, a reasonable smoothing of month to month variations, has been an impressive 272,000 jobs a month. April’s jobs report, in fact, was revised up from 282,000 to 304,000 — a very nice number.
In fact, if you (arbitrarily) look at half-years since the recovery began, this is the best January–June we’ve seen (chart via FiveThirtyEight’s Ben Casselman):
Wall Street had expected a strong report, but not this strong — something more on the order of 215 or 220,000 jobs.
The unemployment rate was cut to 6.1 percent, from 6.3 percent. The unemployment rate is being cut, thankfully, by jobs growth, not by a dropping labor-force-participation rate. The composition of the jobs created wasn’t bad, either: Some decent growth in manufacturing, well-above average growth in business services, which pay much better than the median wage. One soft spot: Earnings didn’t really rise, and haven’t been rising too much this year.
Skeptics — see that incorrigible pessimist Arthur Brooks — will always question why exactly we’re celebrating the labor-force-participation rate merely staying steady, at the lowest rate since the 1970s, and jobs growth at a rate at which it will take years to return to employment levels, as a share of the population, that we saw before the recession.
Two points: It’s all relative, and it is notable that we are seeing stronger growth now than we have seen in years. Second, the labor-force-participation rate isn’t just being pushed down by a bad economy — it’s in a secular demographic decline. I’d like it to rise, and to be higher than it is, but in a certain sense, it’s not ridiculous to celebrate its holding steady as a victory.
One worrying data point: Obamacare’s employer mandate goes into effect for businesses with more than 100 employees in January, and this time last year, we began seeing some weak job growth in full-time jobs and bizarrely strong growth in part-time jobs. These data are very noisy, but it could be happening again: In June, much of the employment growth was in part-time jobs. If that sticks, the next few months could be a lot less encouraging than the last few have been, but we’ll have to see. It’s too early to draw conclusions.
Another downside: While the overall labor-force-participation rate isn’t dropping, the long-term unemployed still don’t appear to be finding jobs — they are more likely to be dropping out of the labor force than finding a job. (Which, by the way, is incredibly difficult for them, which is why some conservative economists have proposed interventions specifically to correct this huge economic and human problem.)