The U.S. economy added a net 115,000 jobs in April, well below expectations (of approximately 160,000), but a lower labor-force-participation rate caused the standard measure of unemployment to tick down to 8.1 percent. The Times reports:
The nation’s employers produced a net gain of 115,000 positions, after adding 154,000 in March, the Labor Department said Friday. April’s job growth was less than economists had been predicting.
The recent trajectory in the jobs numbers has not worked in the president’s favor. “We had a run of great numbers earlier in the year, and then we get a clear softening in the last couple of months,” said Ian Shepherdson, chief United States economist at High Frequency Economics.
The slowdown, he said, could possibly be explained by unusually warm winter weather, which encouraged more companies to hire earlier in the year than they usually do. Higher gasoline prices may have played a role, too. “If it’s the gas price effect, it ought to reverse, since wholesale gas prices dropped sharply over the last few weeks,” Mr. Shepherdson said. . . .
American workers appear somewhat less optimistic. The unemployment rate, which is based on a separate survey of American households, ticked down to 8.1 percent in April, from 8.2 percent. But the decline was not due to the hiring of more unemployed workers; it was entirely because 342,000 workers dropped out of the labor force.
The share of working-age Americans who are in the labor force, meaning they are either working or actively looking for a job, is now at its lowest level since 1981. . . .
Government job losses, which totaled 15,000 in April, continued to weigh on the economy, tugging down job growth as local governments grapple with strained budgets. Private companies added 130,000 jobs, with professional and business services, retail trade, and health care doing the most hiring.
One of the big stories here, as commentators across the spectrum have acknowledged, is the continuing shrinkage of the labor force; the headline unemployment number, U-3, doesn’t count people who want a job but haven’t looked for one recently. Evidence suggests this isn’t entirely due to the slack economy — about half of the drop, probably, is due to changing demographics (in this recession, it might be more like two-thirds), but that still means almost a quarter of a million Americans stopped looking for work last month because they were frustrated by the dismal economy.