The American job market rebounded in April, the government said Friday, as employers added 223,000 positions and the unemployment rate decreased to 5.4 percent.þþThe April figures from the Labor Department came as a few reports showed weak economic data, including new numbers this week suggesting that the economy might have actually shrunk in the first quarter. The initial jobs report for March showed a disappointing 126,000 gain, which was revised down on Friday to 85,000.þþSeemingly opposite signals before Friday’s report — the weak data in recent days but the expectation among more bullish observers that hiring might rebound from March’s low level — created “bifurcated” predictions, said Michael Hanson, senior United States economist at Bank of America Merrill Lynch.þþAlthough the consensus forecast called for a 230,000 gain, Mr. Hanson said some experts were predicting as few as 150,000 or as many as 300,000 positions to be added. “This could be a recipe for a sizable market move post-report,” Mr. Hanson said in an interview before the release of the data.þþAnother important indicator of overall labor market health is the participation rate, which has been stuck near multidecade lows for years, despite healthy hiring in 2015.þþConservative critics of President Obama’s economic policies cite the depressed participation rate as evidence of how weak the economy remains, despite other seemingly rosy data points like the falling unemployment rate, healthy corporate profits and a buoyant stock market.þþOther experts attribute much of the decline to the retirement of baby boomers, the return of some adults to school and other demographic factors.þþWhatever the exact cause, lower labor market participation has caused the unemployment rate to fall, albeit for the wrong reasons.þþFed policy makers have suggested both economic and demographic forces are at work, and they too are closely watching the participation rate. Before letting interest raise rise to a level in line with historic norms, they want to see evidence that labor market slack is finally receding, nearly seven years after the collapse of Lehman Brothers turned what had been a mild recession into an economic rout.
Source: NY Times
