Disappointing, but not shocking. The government’s report Friday that the economy created fewer jobs than expected in April—115,000—showed an unwelcome deceleration of America’s job-creating machine. Economists surveyed by Bloomberg News had a median forecast of 160,000 jobs created. In the big picture, though, the nearly 3-year-old expansion is proceeding at the same pace as the previous two. Slow recovery, in other words, is the New Normal.
The Bureau of Labor Statistics reported that the unemployment rate fell to 8.1 percent in April from 8.2 percent in March. But that wasn’t great news, because it reflected a decline in the share of the population in the labor force, to the lowest level since December 1981. When people drop out of the labor force they aren’t counted as unemployed, so the jobless rate goes down.
More bad news: Average hourly earnings were essentially unchanged, and there was no increase in the length of the average hourly workweek. One of the few bright spots is that the government revised upward its estimate of job creation in March, to 154,000 from the initially reported 120,000.
What makes this recovery seem so frustratingly slow is that the U.S. is coming out of a deeper hole this time. In the 1990-91 slump, employment fell by 1.6 million. The 2001 slump was worse: 2.7 million jobs lost. But neither comes close to the disaster of the 2007-2009 recession, when employment fell by 8.8 million.
By Peter Coy on May 04, 2012
While hourly workers are getting screwed, somebody’s getting paid. Average weekly earnings have soared by 3.7% in the past 12 months. That suggests that since hourly workers are not getting raises, salaried workers are getting pay increases at greater than 3.7%. See average weekly wage chart.