THE EMPLOYMENT SITUATION - APRIL 2012

The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 5.1 million in April. These individuals made up 41.3 percent of the unemployed. Over the year, the number of long-term unemployed has fallen by 759,000.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in April at 7.9 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

Among the marginally attached, there were 968,000 discouraged workers in April, about the same as a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in April had not searched for work in the four weeks preceding the survey for reasons such as school attendance or family responsibilities.

http://www.bls.gov/news.release/pdf/empsit.pdf

U.S. unemployment eases amid tepid job growth

On May 4, 2012 Mark Harden, New Media Editor, Denver Business Journal, commented on April 2012’s unemployment.

The U.S. economy added 115,000 payroll jobs in April, fewer than many economists had expected, and unemployment eased a notch to 8.1 percent, the U.S. Labor Department. The jobless rate was 8.2 percent in March. The pace of U.S. payroll job growth in April was much slower than the average monthly gain of 252,000 jobs seen in January and February. Job gains in March and April have averaged 134,500 a month, according to a broad government poll of employers known as the establishment survey.

Also worrying were the results of the separate household survey -- the poll used to calculate the unemployment rate. It showed that overall U.S. employment fell by 169,000 in April from March. The household survey counts job categories that the establishment survey leaves out, like the self employed and farm workers.

The report had some analysts warning that the nation may be in the same slowdown in new hiring that it saw last spring and summer after a more robust winter. 

"At its best, job creation is falling well short of what is needed to make a substantial dent in unemployment," said John Challenger, CEO of outplacement firm Challenger, Gray & Christmas Inc. "While some would like to attribute the lack of hiring to uncertainty and regulatory roadblocks, the fact is that demand for goods and services simply has not reached a level that warrants accelerated hiring."

The household survey showed that there are 12.5 million unemployed Americans -- defined by the government as jobless people who say they are actively seeking work. Of that number, 5.1 million have been without work for 27 weeks or more. Another 7.9 million people are working part time because they can't find full-time jobs, and 2.4 million are "marginally attached to the labor force," meaning they lack jobs and have looked for one in the past year, but not in the last month.

http://www.bizjournals.com/denver/news/2012/05/04/us-unemployment-eases-amid-tepid-job.html?ana=e_pft

Slower consumer spending may reflect anxiety over pay. Modest gain after robust 1st quarter

American increased their spending more slowly in March, suggesting some are worried their paychecks aren't growing quickly enough. Consumer spending increased .3% in March.

Real incomes need to grow at a faster rate to prevent consumption growth from slowing down. The overall economy grew at an annual rate of 2.2% in the January-March quarter, down 3% from the October-December 2011 period. The weakness reflected government budget-cutting and weaker business investment.

Martin Crutsinger, Associated Press, The Boston Globe, May 1, 2012

Polarized job market hurting those in the middle, study says.

American at the top and the bottom of the income scale are benefiting from the jobs recovery, while those in the middle are being left behind. Professions in the middle, such as financial services and specialty construction, aren’t faring well since the jobs recovery began in February 2010.

Such a shortfall helps explain why income levels have yet to return to levels seen before the recession began and why consumer spending over the past two years has grown at the slowest pace in the post-World War II era. It also suggests a pool of unemployed American will prevent wage increases from fueling inflation. It is hard to imagine how we can have a self-sustaining economic recovery when you’re not creating jobs for the middle.

Alex Kowalski, The Boston Globe, April 12, 2012

What recession?

Contradictions abound.
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http://ieatmediaforbreakfast.blogspot.com/2011_08_01_archive.html

More Contradictory headlines

Weighty Pay Scales: The stock market is improving. Corporate profits are up dramatically. But workers’ wages don’t seem to be rising, a study finds vs. CEO compensation continued on an upward trajectory in ’11

Workers’ salaries and wages are generally stagnant mid high unemployment – even while the economy slowly generates new jobs, stock markets rebound, average worker productivity increases and corporate profits soar.

The biggest pay packages seem to keep getting bigger at major US public companies. Timothy Cook, CEO of Apple Inc. earned $378 million in total compensation in 2011. The package is a dramatic illustration of how CEO pay continues to edge upward as the stock market soars and the economy regains it footing.

Nearly 90% of the economy’s real income growth during the current recovery has gone into corporate profits, after companies slashed payrolls, kept wages down, and squeezed productivity out of existing employees. The average American worker has gotten virtually nothing in their paychecks from this recovery, even though jobs are slowly coming back and profits are up.

Corporate profits have increased 93% before taxes from the fourth quarter of 2008 through the fourth quarter of 2011. The Dow Jones Average has risen by 35%. But mean wages have risen only .4% over the past three years and weekly wages have actually fallen by .1%.

Jay Fitzgerald and Todd Wallack, The Boston Globe, April 8, 2012

Boston Fed chief says economy improving

Eric S. Rosengren, president of the Federal Reserve Bank of Boston, state the nation’s economic recovery is moving forward, but not so fast the Federal Reserve should abandon policies aimed at stimulating growth.

Positive economic signs: strong stock market performance; a falling unemployment rate; and job gains.

Negative economic signs: consumer spending remains subdued; weak housing market; cutbacks in state and local government spending; and the European debt crisis.

The U.S. economy will grow at 2.5% in 2012, a pace that will only modestly lower the national unemployment rate. Nearly 14 million Americans remain unemployed. There is a need to continue using Fed policies to bolster the nation’s economic recovery or risk a backslide.

Erin Ailworth, The Boston Globe, March 2, 2012