Job growth recovered in April, according to data released on Friday by the Labor Department, providing a reassuring economic snapshot after weak numbers in March.þþ• An impressive 211,000 jobs were added last month, bringing the three-month average up to 174,000.þþ• The unemployment rate was 4.4 percent, down from 4.5 percent in March and the lowest rate in more than 10 years.þþ• The average hourly wage grew by 0.3 percent, though year-over-year growth ticked down to 2.5 percent.þþ• The broadest measure of unemployment, which includes people who are working part time or have dropped out of the labor market, was down sharply to 8.6 percent, from 8.9 percent.þþThe TakeawayþþAnalysts forecast better hiring in April after a disappointing showing below 100,000 in March, but the strong growth was even better than expected. Payrolls in the leisure and hospitality industry led the way, followed by health care and financial and professional services. “They’re not buying cars, but they’re buying vacations,” said Diane Swonk, founder of DS Economics in Chicago.þþThough the official jobless rate dipped even lower, the labor participation rate fell slightly to 62.9 percent last month from 63 percent, a signal that workers who had been sidelined are not being drawn back into the labor market.þþ“This gets to be the real issue,” Ms. Swonk said. “As good as this report is, it points to how hard it is to bring in those marginalized works. With skills erosion, people in long-term unemployment have gotten into a vicious cycle. An incoming tide does not lift all boats.”þþOutdated skills and the inability to move to a place where jobs are available may be preventing some people who would like to work from getting back into the labor market.þþWage gains were also modest, even though employers keep complaining about the shortage of workers.þþEmployers must decide whether to buy skills or build them, said Michael Stull, a senior vice president at the staffing company Manpower North America. The small pressure on wages is evidence that they have been trying to buy them, he said, but more businesses are expressing an interest in partnerships with educational institutions or developing skills so that new hires “can earn while they learn.”þþComing less than 48 hours after a meeting of the Federal Reserve in Washington, and six weeks before the next one, the April jobs report may have little immediate effect on economic policy. Fed policy makers made clear — with a unanimously endorsed statement — that the sluggish growth in the first quarter and even the anemic hiring in March had not undermined their confident economic outlook. They signaled a rate increase was still on next month’s playlist.þþJames Athey, senior investment manager at Aberdeen Asset Management, said that “since 2008, jobs have been one of the most important indicators we’ve been looking at.” But he said that since the official jobless rate sank in March to its lowest point in 10 years, “headline job growth appears less and less important” compared with other factors like wage growth and the labor-force participation rate.þþThe BackgroundþþAverage monthly increases in payrolls in the last year have been large enough to absorb those entering the work force and many who dropped out when jobs were scarce. As the labor market tightens and fewer people are searching for work, monthly hiring slows.þþAlthough the broadest measure of unemployment, which includes people in part-time jobs because full-time positions were not available, remains much higher than the official rate, complaints from business leaders about a shortage of skilled workers are common.þþ“It’s not an employer’s market,” said Patrick Bass, chief executive of Thyssenkrupp North America, which makes elevators, steel and other industrial products.þþBased in Germany, Thyssenkrupp employs more than 15,000 people in the United States, but “the labor market is very competitive at all levels,” Mr. Bass said. “We have more positions open than we’ve been able to fill.”þþAndrew N. Liveris, the chief executive of Dow Chemical, who was selected to lead President Trump’s Manufacturing Jobs Initiative, told the Economic Club of New York this week that the single-minded message that everyone needs a four-year university degree is a mistake. Arguing that a strong and sustainable economy cannot be built solely on tech whizzes, he pushed for more apprenticeships, training and partnerships between community colleges and private industry that would produce people skilled in the trades.þþThe left-leaning Economic Policy Institute in Washington issued a report this week that had a complementary message. While the demand for high school graduates has improved since the recession, they are still paid less on average than they were 10 years ago, according to the analysis. (The figures are adjusted for inflation.)þþ“We need an economy that works for everyone, not just for those with the highest credentials,” said Teresa Kroeger, an author of the report.þþFewer than two-thirds of workers 25 to 54, considered the prime working years, have a college diploma. Even in 2000, when the economy was considered to be at full employment, about one in six high school graduates in the labor force were without work.þþAs for students graduating from college this season, they are facing their best job and wage prospects since the recession, according to the institute’s report. (Younger workers traditionally are at a disadvantage when times are tough, because they are competing with more experienced applicants at a time when fewer jobs are available.)þþAt Wake Forest University in North Carolina, Mike Summers, director of employer relations, said the number of employers recruiting on campus this year increased by 22 percent.þþ“We are starting to see employers engaging with our students earlier in the recruiting cycle,” he said.þþThe Washington FactorþþThe administration’s solidly pro-business agenda and promises to cut taxes, eliminate regulations and repair infrastructure has buoyed many executives, but the dysfunction and divisions among Republicans have left some employers in a wait-and-see mode.þþ“Businesses want to hire and planned on hiring,” said Matthew Dolly, director of research at Transwestern, a national commercial real estate firm. “But until policies are ironed out, hiring will remain stagnant for a bit while that happens.”þþSurveys of owners of small and medium-size businesses show they are optimistic about the economy, despite several weak economic indicators, said Cathy Barrera, an economics professor at Cornell University and the chief economic adviser for ZipRecruiter, an online jobs platform. But many employers have yet to act on their stated intentions to add workers. “The thing that stands out most,” Ms. Barrera said, is the “gap between that optimism and the follow-through on that optimism.”þþThat may be why some job sites and recruiting firms are reporting more postings — a sign of longer-range plans — than solid job offers.þþAndrew Chamberlain, chief economist of Glassdoor, a career website, said that he has disregarded most consumer sentiment reports in the last few months. Noting that opinions are more polarized along political lines than ever, he said, “At this point, optimism or pessimism is more about identifying yourself as being part of a political tribe and not so much an indicator of where the economy is headed.”
Source: NY Times
