It isn’t surprising to find out that the economy only created 115,000 last month:
The nation’s employers added 115,000 positions on net, after adding 154,000 in March. April’s job growth was less than what economists had been predicting. The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was because workers dropped out of the labor force.
The share of working-age Americans who are in the labor force, either by working or actively looking for a job, is now at its lowest level since 1981, when far fewer women were doing paid work.
This sentence jumped out at me:
The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was because workers dropped out of the labor force.
If the economy was catching fire, people would increase their efforts at finding a job. They wouldn’t be quitting in despair as they are now.
“It’s a pretty sluggish report over all,” said Andrew Tilton, a senior economist at Goldman Sachs, noting that economists had expected more younger workers to join the labor force as the economy improved. “There were a lot of younger people who had gone back to school to get more education and training, and we thought we’d see more of them joining the work force now. May, June and July, the months when people are typically coming out of schooling, will be the big test.”
This graph does a nice job of highlighting the LFPR problems:
ZeroHedge offers this perspective:
In April, the number of people not in the labor force rose by a whopping 522,000 from 87,897,000 to 88,419,000. This is the highest on record. The flip side, and the reason why the unemployment dropped to 8.1% is that the labor force participation rate just dipped to a new 30 year low of 64.3%.
In short, people are indicating what they think of Obamanomics with their refusal to look for employment. The unemployment rate is almost irrelevant because people dropping out of the workforce will likely continue its decling. That won’t strengthen consumer confidence. The unemployment rate doesn’t mean anything to people who’ve quit looking for work.
Ed nails it with this commentary:
That weakness will keep jobs and the economy at the top of the list for voter concerns, and keep Obama and his campaign on their mission to talk about any other distraction they can find from it.
This report won’t help President Obama make the case that he knows what he’s doing in building a strong economy. AxelPlouffe better buy more Maalox. They’ll need it.