New York Times article on slowdown in jobs growth:
The nation’s employers are creating jobs at less than half the pace they were when this year began, according to a government report released Friday.
The addition of just 115,000 jobs in April was disappointing, but economists urged no panic just yet. ...
Many economists had been predicting that strong job growth early this year would persuade many people sitting on the sidelines to re-enter the job market.
Instead, for reasons that are unclear, workers continue to peel off the labor force. An estimated 342,000 Americans dropped out of the job market altogether in April. That is why the unemployment rate fell to 8.1 percent from 8.2 percent — not because more workers found jobs, but because so many people left the work force. ...
The share of working-age Americans who are either working or actively looking for a job is now at its lowest level since 1981, when far fewer women chose to do paid work. The share of men taking part in the labor force fell in April to 70 percent, the lowest figure since the Labor Department began collecting these data in 1948.
The decline in labor force participation is partly because baby boomers are hitting retirement age. But economists had expected the wave of retirements to be at least partly offset by the number of workers rejoining the labor force as the economy improved. ...
Instead, the number of young people in the labor force also fell. ...
With the average duration of unemployment now at an interminable 39.1 weeks, many people have simply given up looking for work. ...
Rather than prodding employment growth, the government is actually providing a drag on the economy.
Government spending has fallen for six straight quarters as Recovery Act funds have been exhausted and state and local governments have struggled with tax revenue shortfalls. Accordingly, the public sector has been shedding workers relatively consistently since the recovery officially began in mid-2009, with the exception of a brief spike of temporary hiring during the decennial census. Last month, governments eliminated 15,000 jobs. ...
Averaging the strong months of total job growth in January and February with the weaker ones in March and April, the economy has been adding about 200,000 jobs a month this year.
Job growth of any kind is obviously welcome. That pace, however, is not nearly fast enough to recover the losses from the Great Recession and its aftermath in the foreseeable future. At this rate, it would take more than two more years just to return to the prerecession peak in employment, though the country should actually have even more jobs given population growth and the current size of the economy.
Today the United States economy is producing more goods and services than it did when the recession officially began in December 2007, but with about five million fewer workers.
Because employers have learned how to produce more with fewer workers, there is also debate about what exactly “healthy” employment would look like in the current economy, and whether it makes sense to use the data from before the financial crisis as a benchmark. ...
http://www.nytimes.com/2012/05/05/b...ed-only-115000-jobs-in-april-rate-is-8-1.html
Interesting warning at the end about what might be a new "full" employment rate. If so, that would make a job guarantee by the federal government all the more attractive and necessary.
