Job seeker Alan Shull attends a job fair in Portland, Ore.
WASHINGTON — U.S. job growth slumped in April for a second straight month. It suggested an economy that is growing steadily but still sluggishly, which could tighten the presidential race.
A drop in the unemployment rate wasn’t necessarily a healthy sign for the job market. The rate fell from 8.2 percent in March to 8.1 percent in April. But that was mainly because more people gave up looking for work.
People who aren’t looking for jobs aren’t counted as unemployed.
The 115,000 jobs added in April were fewer than the 154,000 jobs added in March, a number the government revised up from its first report a month ago of 120,000. It also marked a sharp decline from December through February, when the economy averaged 252,000 jobs per month.
The percentage of adults working or looking for work has fallen to its lowest level in more than 30 years. Many have become discouraged about their prospects.
Why it matters
Job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend — and consumer spending drives about 70 persent of the economy.
The long slog back
Job creation has been frustratingly slow since the Great Recession ended. Only 43 percent of the jobs lost have been regained 34 months later. The rebound was only slightly stronger after the previous recession, which ended in November 2001. By September 2004, 54 percent of the jobs lost had been regained. It took five more months before all the jobs were back.
Don’t expect such a bounce back this time.
A penny more for work
For people with jobs who assume they’re not affected by Friday’s report, take notice: The report notes that the average worker’s hourly pay eked out a gain of just one penny in April.
Over the past year, average pay has ticked up 1.8 percent. Inflation has been roughly 2.7 percent. Which means the average consumer is fighting a losing battle with price increases.
When even people who have jobs have less money to spend, the economy tends to suffer.
Young and unemployed
It’s a tough time to be young in America.
The unemployment rate in April for workers under 25 was 16.4 percent. That’s nearly 10 percentage points above the rate for those 25 or older.
It could be worse. You could live in Europe. In the 17 countries that use the euro, the unemployment rate for young workers is 22.1 percent.
Or worse still. In Greece and Spain, two of the countries most damaged by Europe’s debt crisis, one in two workers under 25 is unemployed.
Tepid economy, hiring
Over time, strong economic growth is vital for strong job growth.
But early this year, hiring accelerated much faster than economic growth did. Job gains averaged a strong 229,000 in the first three months. By contrast, the economy grew at a sluggish annual rate of 2.2 percent.
Economists began to wonder: Would growth catch up with hiring? Or would hiring slow to match economic growth as measured by gross domestic product, or GDP?
Some analysts say April’s disappointing job growth suggests an answer, and it’s not a cheerful one:
“It now appears that jobs have decelerated into line with GDP, rather than GDP accelerating to catch up with jobs,” said Nigel Gault, an economist at IHS Global Insight.
The job market seems to look better with hindsight.
The Labor Department has revised job growth upward for 10 straight months — and for 18 of the past 21. Over the past 10 months, it’s added 413,000 jobs to the original estimates.
The job figures are revised twice. They’re updated in the two months after they first come out. And they’re revised again in an annual update.
History shows that the updated totals typically follow the trend in job creation: When the economy is creating jobs consistently, the revisions tend to be positive. Months of job losses typically lead to negative revisions.MORE IN World/National BusinessREDMOND, Wash. — Microsoft thinks it has the one. Full StorySAN FRANCISCO — Yahoo is buying online blogging forum Tumblr for $1. Full Story
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