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Job seekers wait in line to enter the San Francisco Hire Event job fair on November 9, 2011 in San Francisco, California. There's been a drop-off in new jobs as winter turns to spring.
"Little changed, little changed, little changed." That's the mantra from today's April jobs report from the Labor Department. It's not horrible: the economy added 115,000 jobs last month and the unemployment rate fell to 8.1 percent from 8.2. But economists were expecting more like 160,000. The modestly good news is that the initially rather disappointing March number was revised up to 154,000 from 120,000. This continues a trend of upwards revisions. February was also revised up, again, to nearly 260,000.
Unfortunately, the trend that isn't continuing is monthly job growth above 200,000 new jobs added each month. That pace would translate into GDP growth — a general measure of how well the economy is doing — in the 2.5-percent ballpark. That's not the 4-5 percent you'd expect in a "normal" recovery, but it also isn't the meager 1.7 percent we averaged in 2011, when the economy endured several shocks that kept us on the edge of a double-dip recession.
The new headline number in the month BLS reports is rapidly becoming not the actual jobs number, nor the unemployment rate, but the labor participation rate, which is at its lowest point since the early 1980s. With poor job prospects out there, workers are giving up on looking for work, and this reduction in the size of job-seekers is taking the overall unemployment rate down. It's a demoralizing trend. (At Reuters, Felix Salmon zeroes in on this aspect of the data and provides a couple of very scary charts.)
The thing to get slightly freaked out by in all this is that we are back in the jaws of a bad pattern: the past two springs have seen the year start off optimistically, only to revert to sluggish job and GDP growth after a few decent months. Last year, we had the Arab Spring and Japan earthquake and tsunami to take into account. This year, we have...weather.
Yes, weather. The "weather thesis," as I'm calling it, is gaining credence (I scoffed at it back when it was being formulated in January and February). The idea is that mild winter weather pulled job growth forward at the beginning of the year, as people got outside to shop, fix up their homes, etc. We're seeing that moderate now.
However, according the BLS, we did see job gains, albeit modest ones, pretty much across the board. So although we're not seeing particularly robust job growth, we're not seeing any particular sector suffer disproportionately. Adding jobs is always better than not adding them.
I think this is good news for California, which has a large and diversified economy. We have seen California's unemployment rate tick up, to 11 percent from 10.9, based on people who had quit looking for work deciding that the economy is doing well enough for them to get back in the game.
But at the national level, I'm afraid we're drifting back toward what I've called "stuckflation" — a period where inflation is low, but unemployment is high and GDP growth is tepid.