The U.S. Labor Department's Bureau of Labor Statistics released the April unemployment statistics Friday, showing they ticked down a notch to 8.1 percent -- better than March's 8.2 percent and much better than April 2011 when unemployment climbed to 9 percent.
It was good news but the focus was on the number of jobs created -- the only real mechanism for putting people to work and reinvigorating the economy.
Labor said 115,000 jobs were created last month -- 130,000 in the private sector as governments continued to shed workers. The number represents about half what is needed to bring back the roaring '90s when the federal government showed budget surpluses. And if healthcare, social services and temporary business services are excluded, only 91,000 private-sector jobs were created.
University of Maryland economist Peter Morici said for unemployment to be reduced to 6 percent within the next three years, the economy would have to add 370,000 a month, something that's not going to happen with the gross domestic product growth limping along at the first quarter's 2.2 percent.
Friday's "employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but much more remains to be done to repair the damage caused by the financial crisis and the deep recession," said Alan B. Krueger, chairman of the Council of Economic Advisers.
Krueger said 4.25 million payroll jobs have been added to the U.S. economy since February 2010 when unemployment stood at 9.7 percent.
The problem with unemployment figures is that they only reflect the number of people actively looking for work -- not those who have given up or are underemployed.
The BLS estimates 5.1 million people have been without work for 27 weeks or more, with 7.9 million working part-time because their hours have been cut back or they are unable to find full-time work. Some 2.4 million others "were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey," the BLS said.
If all those discouraged workers are included, estimates for real unemployment stand at 14.5 percent, 18 percent if all the new college graduates working at fast-food jobs are counted, Morici estimates.
Christine Owens, executive director of the National Employment Law Project, said the answer is investment to create more jobs and increased wages to stimulate demand.
"Increasingly, Americans are finding that low-wage jobs are their only option," Owens said. "While solutions such as the restoration of organizing and bargaining rights, stronger enforcement of wage laws, and a renewed social compact among corporations and their employees are powerful and necessary antidotes for the troubling erosion of wages, a critical first step we could take right now is to raise the minimum wage, close loopholes like the excessive employer tip credit, and index the rate to inflation so that it keeps pace with the rising cost of living."
In the near-term, however, "it is looking more and more like we will see a repeat of last year's spring and summer lull in job creation," said John A. Challenger, chief executive officer of the outplacement firm Challenger, Gray & Christmas.
Not good news for President Obama, heading into his re-election race.
Morici blamed the sluggish recovery on "temporary tax cuts, stimulus spending, large federal deficits, expensive but ineffective business regulations and costly healthcare mandates."
"The fact is that demand for goods and services simply has not reached a level that warrants accelerated hiring," Challenger said. "In areas, where demand has improved, so has hiring. Just look at the auto industry. Chrysler just announced that it will forgo its usual summer shutdown and keep all its plants humming in order to meet consumer demand. Until more companies are experiencing the same type of demand, we are not going to see an explosion in hiring."
But fears of a new recession also play a role.
"The economic crisis in Europe and mounting problems in China's housing and banking sectors continue to instigate worries among U.S. businesses about a second major recession, and these discourage new hiring," Morici said. "The U.S. economy continues to expand albeit moderately but is quite vulnerable to shock waves from crises in European and Asia."
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