Wednesday, May 09, 2012

Yet another weak jobs report.

American employers added 115,000 workers in April, the smallest increase in six months. Bloomberg News-surveyed economists had estimated a 160,000 advance. The March total, however, was revised upward from 120,000 to 154,000. At the same time, the jobless rate unexpectedly fell to 8.1%, but only because more people left the labor force, adding to concern the economic expansion is cooling. The unemployment rate has exceeded 8% since February 2009, the longest such stretch since monthly records began in 1948. Average hourly earnings were unchanged from the month before, the first time without a wage increase since August, and the average employee workweek held at 34.5 hours. Growth in both figures would have suggested future job gains.

Stocks are down, reflecting the negative jobs news. The FOX Index, which defines a “healthy” market as above 15,800—a total formed from adding a Dow of 12,000, an S&P 500 of 1,300, and a NASDAQ of 2,500—is positive at +1,325 (chart), but has dropped over 600 points from its all-time high of +1,935 reached on May 1, when each component had topped the next level, meaning a Dow over 13,000, an S&P over 1,400, and a NASDAQ over 3,000. Currently, the numbers are down to Dow 12,835, S&P 1,355, and NASDAQ 2,935.

Nevertheless, our chart measuring progress toward Obama’s unemployment goals (below) continues showing he likely will be able to claim (very slight) net job growth by the time the pre-election October jobs report comes out.

Partly because Obama will be able to claim net job growth, conservatives are increasingly focusing on America’s awful labor force participation rate. That rate, which documents the total share of working-age people actually in the labor force, has fallen to 63.6%, its lowest level since December 1981.  That was a time when women were still joining the workforce, thereby sending the labor participation rate higher. Now, as the chart below shows, the participation rate is moving ever more depressingly lower.

It’s our labor force’s frowny face.

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