Solid April Jobs Report Shows Dropping Unemployment Rate, Business Expansion
The economy added 165,000 jobs in April, bringing the overall unemployment rate down a tick to 7.5 percent. The monthly report from the Labor Department also included upward revisions to the last two reports, helping to ease fears of a slowdown.
Last month’s jobs numbers seemed ominous. The number of positions added in March was initially reported as 88,000, lower than expected and insufficient to keep up with the number of people entering the labor force. That was revised upward to 138,000, a much healthier figure. February’s jobs report was also revised upward, from 268,000 to 332,000. Combined, that’s an extra 114,000 jobs over the previous two months.
The economic recovery, while not exactly booming, is much steadier than had been feared by many experts. A panel of 90 economists had predicted a gain of 140,000. One of those economists is Eric Green, head of research at TD Securities Inc. Green, who nearly nailed the actual number with a guess of 162,000 this month, said, “We’re still in a soft patch, but the job market is not falling apart. The U.S. labor market is in much better shape than most people feared.”
Friday morning, the stock market reacted very positively to the news, as the Dow Jones Industrial Average crossed the 15,000 mark for the first time. The Standard & Poor 500 also rose, to over 1,600. And according to Bloomberg, “the yield on the benchmark 10-year Treasury note rose eight basis points, or 0.08 percentage point, to 1.71 percent.” All of these are clear signs of optimism from investors.
There are still 11.7 million people out of work, though that number has decreased by 673,000 since January. However, the more serious problem is the 4.4 million long-term unemployed people. Those workers will have an especially difficult time re-entering the labor force, and almost certainly at much lower wages than they had previously made.
Altogether, it was a positive jobs report, but one that shows that the economic recovery still has a long way to go. It does appear headed in the right direction, though, despite recently enacted higher taxes and large spending cuts by the federal government, both of which are holding back the recovery.