U.S. unemployment rate reaches lowest point in four years

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Nearly four years after the end of the Great Recession, the 7.5 percent unemployment rate for April is still 11/2 times what it was when the economy went sour.

Although the Bureau of Labor Statistics reported Friday that 165,000 jobs were created in April, the country remains more than 2.5 million jobs short of the 138 million jobs it had in December 2007. Even discounting the half-million government jobs that have been cut since the start of the recession, the private sector is still down by more than 2 million jobs.

April's unemployment rate improved from March's 7.6 percent and Wall Street seized on the jobs report, since it was markedly better than Wednesday's report by the payroll company ADP that showed anemic job creation.

ADP had estimated that private companies had added only 119,000 jobs in April. But the government figures showed that private industry, in fact, added 176,000 jobs. Revisions to February and March job totals added another 114,000 jobs to the nation's payrolls, which makes the average job creation for the last three months 212,000.

The stock markets soared on the news at the opening bell, setting records.

The Dow Jones industrial average crossed 15,000 for the first time, and the Standard & Poor's 500 index, a broader market measure, broke through 1,600 to close at a record 1,614.42. Eight of the 10 industry groups in the S&P 500 rose.

The Dow ended up 142.38 points, or 1 percent, to close at 14,973.96. The Nasdaq composite index climbed 38.01 points, or 1.1 percent, to 3,378.63.

Among local stocks registering the biggest percentage advances, U.S. Steel jumped $1.08 to finish at $18.14, Allegheny Technologies advanced $1.38 to close at $27.57, Education Management Corp. rose 20 cents to close at $5.86, and L.B. Foster finished at $44.27, up $1.50.

Koppers Holdings, which reported first-quarter earnings that fell short of analyst estimates, was among the handful of regional stocks losing ground. Its shares shed 39 cents to close at $40.30.

While Wall Street was excited about the news, the White House Council of Economic Advisors seemed less enthusiastic.

Alan B. Krueger, chairman of the council, issued a news release that said "while more work remains to be done, today's employment report provides evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression."

It was the exact same opening he used in his statement on the March unemployment report -- and nearly the same statement has appeared in reaction to all the unemployment reports since December.

Mr. Krueger cautioned, as he had last month, against the effects of the sequester that took effect in March. Automated federal budget cuts, known as sequestration, have reduced spending in numerous areas nationally. The across-the-board cuts were triggered as a result of ongoing budget battles in Washington, D.C.

"Now is not the time for Washington to impose self-inflicted wounds on the economy," Mr. Krueger reiterated.

April's 7.5 percent unemployment rate, down from 7.9 percent in January, is still far above the 5 percent rate of December 2007 when the recession started.

Other metrics of employment show the picture to be even worse.

If the unemployment rate included workers who are working part time because full-time work is not available (7.9 million workers) and workers who are only marginally attached to the labor force, such as discouraged workers who have given up looking for work because jobs are not available, then the so-called "real unemployment rate" would be 13.9 percent, which is 5.1 percentage points above where it was at the start of the recession.

The labor force participation rate for April was unchanged from 63.6 percent in March, the lowest it has been since 1979.

Heidi Shierholz, an economist with Washington, D.C.-based Economic Policy Institute, called the employment report "a classic 'hold-steady' report" and explained that there were enough jobs to hold the unemployment rate about where it was but not enough to make it much better.

"In good times this would be fine, but at a time of persistent economic weakness, it represents an ongoing disaster," she wrote in an analysis of the month's unemployment numbers. To get back to full employment, the labor market needs to add 8.7 million jobs to account for population growth.

There were some glimmers of hope.

The Bureau of Labor Statistics reported that 83,000 fewer people were unemployed in April than in March, bringing the total of unemployed people to almost 11.7 million. The labor force expanded during the month by 210,000 and the number of people working expanded by 293,000.

Full-time work, however, was not easy to find. Almost 8 million people were working part time because of economic reasons, an increase of 278,000 workers. The average workweek, reflected in the payroll data, also fell for private sector workers who saw their hours go from 34.6 to 34.4 hours a week.

Payrolls, as measured by a separate survey of employers, grew by 165,000 jobs in April. Those jobs tended to be in general merchandise stores, which added 14,800 jobs, trucking (11,700 jobs), temporary help, (30,800 jobs) and bars and restaurants (37,900 jobs).

Manufacturing had net of level employment during the month with mills that make primary metals losing 1,300 jobs. The construction sector lost 6,000 jobs during the month, but was still 154,000 jobs above last April.

Health care added 19,000 jobs, 13,600 of those were in ambulatory care services such as doctor's offices (5,400 jobs) and home health care (6,100 jobs).

The government sector slashed 11,000 jobs. The federal government cut 4,900 jobs outside of the postal service and 3,500 postal jobs.

State government added 1,700 jobs in education, such as at public universities, but local public schools cut 1,500 workers. As of April there were 17,900 fewer jobs in public schools than there were in April 2012 and 336,300 fewer jobs in public schools than there were in April 2009.

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Ann Belser: abelser@post-gazette.com or 412-263-1699.


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