The monthly employment report for April was released a short time ago and the news was very upbeat. While the headlines will say the unemployment rate increased to 9.9 percent, that is because there were 805,000 additional people that were counted as part of the labor force.
The real headline is that we saw respectable job growth in April, 290,000 new jobs, on top of an upwardly revised 230,000 new jobs in March. While we really need to see 400,000 or 500,000 new jobs on a consistent basis to begin making a dent in the 15.3 million unemployed, there is no denying that things are headed in the right direction.
The job growth for April, subject to two revisions over the next couple months, was broad-based with 44,000 new jobs in manufacturing, 80,000 positions added in professional and business services, leisure and hospitality accounting for 45,000, and health care tallying 20,000 additional jobs.
The news wasn't all rosy however, as the number of long-term unemployed -- those out of work longer than 6 months -- increased to 6.7 million people. This is nearly 46 percent of those unemployed and in a nutshell characterizes this labor market: People are less likely to lose a job now, but there's a 1-in-2 chance that those out of work will still be looking six months later. A sobering statistic indeed.
Also, the U-6 rate of unemployment which is the "fully-loaded" unemployment rate once you account for discouraged workers and those that want full-time work but are working part-time for economic reasons, is now 17.1 percent. This measure has increased every month thus far in 2010.
The takeaway here is that job growth is back, but it will need to continue to accelerate in order to get millions of unemployed Americans back to work. This positive news on the U.S. economy should calm, at least temporarily, some of the European debt fears that gripped markets on Thursday afternoon.
Average hourly earnings are up a scant 1.6 percent in the past 12 months. While the Federal Reserve will crow that inflation is still "subdued," a 1.6 percent increase in income won't carry this economy very far at all.
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