New figures released on Friday morning showing a drop in the American unemployment rate actually mask the troubling reality about the state of the U.S. economy and job market.
While the percentage of the work force technically considered to be unemployed is down slightly, the number of discouraged Americans who have given up looking for work is up.
Republican presidential candidate Mitt Romney calls the employment report “terrible and very disappointing.”
The unemployment rate in April fell to 8.1 percent, down from 8.2 percent in March. But the 115,000 jobs added to the workforce is the lowest gain in six months, and significantly below the 160,000 new jobs predicted by economists surveyed by Bloomberg News.
Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began being kept in 1948, and 12.7 million people are officially considered to be unemployed.
But that doesn’t tell the whole story. The unemployment rate actually fell largely because 342,000 Americans gave up the search for a job. The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, down from 63.8 percent and the lowest since December 1981, according to Bloomberg News.
This suggests “Americans are growing more pessimistic on job prospects,” Reuters observed.
The official unemployment rate includes only those who have looked for a job in the most recent four weeks.
The so-called underemployment rate, which includes part-time workers who would prefer to work full time as well as people who have given up looking for work, remains high at 14.5 percent.
The number of people who do not have a job and are not consistently looking for one — including retirees, high school and college students, and stay-at-home moms as well as the discouraged former job seekers — now stands at 86 million, CNN reported.
Other findings from April:
- The number of temporary workers increased 21,100 last month, suggesting that companies remain reluctant to take on permanent staff.
- Hourly earnings rose just 1 percent, indicating that most of the jobs created are low-paying positions.
- Construction jobs dipped 2,000 in April after falling 3,000 in March, meaning the new housing market is not rebounding as might have been hoped.
The number of new jobs created last month “is way, way, way off from what should happen in a normal recovery,” Romney said on “Fox and Friends” Friday morning.
“The reason that you’re seeing the unemployment rate go down is because you have more people dropping out of the workforce than you have getting jobs. It’s a terrible and very disappointing report this morning.
“Clearly the American people are wondering why this recovery isn’t happening faster, why it’s taking years and years for the recovery to occur and we seem to be slowing down, not speeding up. This is not progress.”
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