Hiring Numbers Ease Concerns of a Spring Slowdown

The March jobs report raised concerns among economists when the Labor Department released it in early April.  According to that report, employers added only 88,000 employees during March, which raised fears that the spring season would see a stall in hiring in 2013 as it did in the previous two years.  The number of jobs that must be created each month just to keep pace with population growth is generally estimated to be between 90,000 and 125,000.  If the labor force participation rate stays constant from month to month, the only way to reduce the unemployment rate is to create jobs in excess of that estimate.

However, the April jobs report offered much brighter news.  It estimated that 165,000 jobs were created during April.  In addition, the job numbers for February and March were revised upwards from 268,000 to 332,000 and from 88,000 to 138,000, respectively.   The unemployment rate ticked down from 7.6 percent to 7.5 percent, its lowest mark in over four years.

But the labor force participation rate remained stuck at 63.3 percent, tied for the lowest mark since 1979, when fewer women were in the workforce.  Moreover, the quality of jobs being created in the spring raises concerns.  As of March, one in 13 American jobs is in the category “food services and drinking places,” a ration which is an all-time high.  These jobs tend to be low-wage.  Economists worry that unemployed people may rationally decide to decline jobs offering low wages, because such employment may offer little net benefit (for example, through increased child-care costs or loss of unemployment benefits).

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