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4 straight months of job growth

By Greg McBride, CFA · Bankrate.com
Friday, May 7, 2010
Posted: 9 am ET

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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7 Comments
Patriot
May 13, 2010 at 2:11 pm

Lets face it Geithner is a puppet for the Federal Reserve, a private corporation who answers to no one. It's time to take our dollar back. We pay trillions of dollars in interest to a Cartel that prints money. They don’t have gold reserves backing them. So why do we need them?

The Treasury should do their job and get rid of the Federal Reserve and start controlling the American Economy and not let a private entity create a global economic system to benefit them selves. We elect officials to be accountable so we have a way to keep the countries best interest in mind. Every time the Federal Reserve does something it is not always in the U.S. best interest. They have done a poor job of managing our economy or maybe that was the plan. We had to borrow more money to fix the economy that they were managing; they just print and collect interest for nothing and we are stuck with the debt, a broke middle class, lets not forget the small business owners who are losing everything with no assistance. Tighten up on the money supply and finish them off.

Small business makes up 80% of our economy but we baled out the Federal Reserves banker friends oh don’t forget to give the talented CEO’s and top executives their bonus. If we let them fail they would not have jobs; and no salary let alone a bonus
But their talented!! Yes they are they helped the Federal Reserve get control of the country.

It was said best by Paul Volker the ex Fed Chief “the only way to fix this economic problem is to have a global currency” (that was on PBS) whose agenda are really completing. Who will control that system? The Federal Reserve and their friends will control the currency and not have any one to answer to. I think it was Rockefeller who said “I don’t need to control the military just the monetary system” Once this happens the cartel won’t need a vote to Tax us because the constitution will no longer be in effect. The constitution states congress is to make laws and print money, not an independent corporation of greedy elites.

tomos
May 12, 2010 at 12:02 pm

This job report is nothing more than another big Obama LIE. Why would anyone believe anything he has to say. We are not heading in the right direction.

Greg McBride
May 11, 2010 at 9:40 am

Well said. To be clear I should have said it was a step in the right direction as far as the job market is concerned. I share your skepticism about what direction we're headed in from an overall economic standpoint.

artist
May 11, 2010 at 9:37 am

Actually April job growth was driven by the private sector

....

I didn't deny that, Greg.

There are too many other factors to consider, when determining if we're heading in the right direction.

Right around the corner are higher taxes and/or inflation/interest rates.

There will surely be economic fallout or adjustments, as a result.

It is too soon to say we're heading in the right direction.

I would however agree that the last 3 months were better than the numerous months that preceded them.

I'm just not convinced we're heading in the right direction.

Greg McBride
May 07, 2010 at 4:19 pm

Actually April job growth was driven by the private sector. 231,000 of those new jobs were from the private sector and just 66,000 were temporary government census workers. (State and local governments plus the postal service cut jobs so net government new jobs totalled 59,000). I'm with you on the deficit, though. Let's hope our elected officials in Washington take a lesson from Greece and begin to make the tough decisions about cutting spending. But that's just wishful thinking on my part.

artist
May 07, 2010 at 3:47 pm

there is no denying that things are headed in the right direction

....

Yes, there is.

A substantial amount of those jobs are temporary gov't jobs that are "paid for" by deficit spending.

Which brings us to the deficit.

Right direction?