Waiting on Superman: Good Jobs Report Not Enough to Save the Day

The US economy added more jobs than expected in April, but is still not growing at a pace to cure the nation's unemployment crisis or its stagnant economy. The Department of Labor said Friday that 244,000 jobs were added in April, up from a revised gain of 221,000 in March. The number reflects 268,000 jobs in the private sector, balanced off a bit by 24,000 lost jobs in the public sector. The net job growth is still significantly higher than the 185,000 jobs that were predicted to be created. The unemployment rate rose a bit to 9%, up from 8.8% in March. That number may be a bit misleading, as it only counts those who are actively seeking for work but are unable to find it. A growing economy would spur additional people to resume looking for work, leading to the seemingly paradoxical scenario where both jobs growth and unemployment numbers rise simultaneously. Another factor is the addition of workers to the workforce. The April numbers, while better than expected, still barely covered the number of new entrants into the workforce. Job growth would have to accelerate in order to cover new workers and reduce the unemployment rate. In the short term, expect more economic pain. Oil prices dropped Thursday, but are still high enough to dampen any economic upswing. Food prices are also rising, dealing a deadly combination blow to consumer spending in the near-term. “Longer-term prospects are more promising, however,” said Gad Levanon, associate director of macroeconomic research at the Conference Board. “In the last six months, employment outside of construction, finance and state and local government has already been growing faster than nearly any other six-month period in the last decade. Once constraints in these hard-hit sectors loosen, overall job recovery is likely to pick up pace.”