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For Immediate Release
Contact: Michelle Bazie,202-408-1080,bazie@cbpp.org

Statement: Chad Stone, Chief Economist, on the April Employment Report

Today's jobs report contains much encouraging news, but it also
reminds us that the economic recovery will have to gather more strength
to bring down the unemployment rate.

While the economy has been
growing since the middle of last year and employers are beginning to
add jobs, the unemployment rate remains stubbornly high.

WASHINGTON

Today's jobs report contains much encouraging news, but it also
reminds us that the economic recovery will have to gather more strength
to bring down the unemployment rate.

While the economy has been
growing since the middle of last year and employers are beginning to
add jobs, the unemployment rate remains stubbornly high. Unlike the
early 1980s, when the unemployment rate rose sharply and then fell
equally fast, this recovery still looks like the recoveries from the
last two recessions -- when the unemployment rate stayed high for a
considerable time after the recession ended (see chart).

The
high unemployment rate reflects people returning to the labor force to
look for jobs, but it also reflects relatively slow economic growth.
The economy needs to create about 125,000 jobs a month just to keep
pace with normal growth in the labor force. It needs to create even
more jobs when people are returning to the labor force after a
recession. Job growth of at least 200,000 to 300,000 a month -- a level
we reached in April -- is needed on a sustained basis to make a
real dent in unemployment. But for that to occur, the economy has to
grow faster than the 3.2 percent pace of the first quarter of this year.

Forecasters do not now see that in the cards. To the contrary, many expect the economy to slow
in the second half of this year as the stimulus from the Recovery Act
that President Obama and Congress enacted in February 2009 begins to
wind down and as state actions to address their budget crises act as a
drag on the recovery. (In the first quarter of 2010, declines in state
and local spending subtracted half a percentage point from the growth
rate, and state and local government payrolls fell in April.)

Congress
should take steps to assure unemployed workers that they will continue
to receive the help they need and to give the recovery a shot in the
arm by passing a meaningful jobs bill. Extending the Recovery Act
measures that provide extra weeks of unemployment insurance (UI) and
subsidized COBRA health insurance coverage for unemployed workers to
the end of the year and providing additional fiscal assistance to
cash-strapped states -- two critical provisions in the pending
congressional jobs bills -- are widely recognized as highly effective
ways to boost economic activity and create jobs. They will help workers
struggling to find a job and in danger of losing their UI benefits, and
they will help the economy.

About the April Jobs Report

While
the labor market has stabilized after a long deterioration, there are
many more people looking for work than there are new jobs being created
and the job market is still in the very early stages of reviving.

  • Private
    and government payrolls rose by 290,000 jobs in April, with 66,000 of
    those jobs coming from temporary government hiring for the decennial
    census. Private-sector payrolls rose by 231,000 jobs. Despite the
    strong gains in April, net job losses since the recession began in
    December 2007 total 7.8 million. (Private-sector payrolls have shrunk
    by 8.0 million jobs over the period.)
  • Revisions to the
    data show that the economy added rather than lost jobs in February and
    that March's job gains were larger than first reported. So far this
    year, employers have added a net 573,000 jobs to their payrolls,
    compared with a loss of 2.8 million jobs over the first four months of
    last year.
  • After three straight months at 9.7 percent,
    the unemployment rate edged up to 9.9 percent, as large numbers of
    people came back into the labor force looking for work. April's
    unemployment rate was 4.9 percentage points higher than at the start of
    the recession.
  • For the fourth straight month, more people
    entered the labor force than left it. Since December, the labor force
    participation rate (the percentage of people with a job or actively
    looking for a job) has risen 0.6 percentage points to 65.2 percent,
    with half of that gain coming in April.
  • Some of April's
    surge in labor force participation translated into higher unemployment,
    because not everyone found jobs immediately. But the number of people
    with jobs increased as well. As a result, the percentage of the
    population with a job has risen 0.6 percentage points so far this year,
    to 58.8 percent. Nevertheless, both the labor force participation rate
    and the percentage of the population with a job remain near lows that
    were last seen in the 1980s.
  • The Labor Department's most
    comprehensive alternative unemployment rate measure -- which includes
    people who want to work but are discouraged from looking and people
    working part time because they can't find full-time jobs -- edged up to
    17.1 percent in April. While that figure is below the peak of 17.4
    percent reached in October 2009, it is still quite high.
  • Long-term
    unemployment remains a significant concern. Over two-fifths (45.9
    percent) of the 15.3 million people who are unemployed have been
    looking for work for 27 weeks or longer. That is the highest percentage
    on record in data going back to 1948. These long-term unemployed
    represent 4.3 percent of the labor force, a higher percentage than at
    any point in the past six decades (the next highest was 2.6 percent in
    June 1983).

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