U.S. employment grew at a sluggish rate in April, with a net increase in jobs of only 115,000. The unemployment rate fell to 8.1% as discouraged job seekers left the labor market. “Economists surveyed by Dow Jones Newswires expected a gain of 168,000 in payrolls and for the jobless rate to remain at 8.2% in April,” the Wall Street Journal reports.
As for discouraged people leaving the labor market, Catherine Rampell in the New York Times writes, “The share of working-age Americans who are in the labor force, meaning they are either working or actively looking for a job, is now at its lowest level since 1981—when far fewer women were doing paid work.”
What job growth there was, reports the Journal, came from a variety of sectors, including professional and business services such as engineering and software design.
Part of what's holding back employment is companies' ability to increase productivity with fewer workers. I have reported earlier that productivity increases need not necessarily lead to job losses, but as Rampell in the Times notes, “Because employers have learned how to make more with fewer workers, there is also debate about what exactly 'healthy' employment would look like in the current economy, and whether it still makes sense to use the pre-financial-crisis economy as a benchmark for what the employment landscape should look like.”
She adds, “On Thursday, John Williams, president of the Federal Reserve Bank of San Francisco, suggested that the 'natural' rate of unemployment might now be as high as 6.5%. Before the recession, economists generally believed it was around 5%.”
If there is good news, it comes from David Leonhardt in the Times, who says unusually warm weather in January and February may have pulled forward purchases that would have been made in March and April. If that's the case, he writes, “…the coming months would bring roughly 175,000 net new jobs per month, on average.”