I was looking at today's Job Reports in the NY Times that the economy added 290K jobs during April. A small piece of good news. But as I mentioned yesterday, the economy lost 444K jobs (presumably since there were that many new unemployment applications. Not quite as many as the week before, but still means there were 154K more new unemployment applicants in one week than jobs created for the month. And the overall unemployment rate went up to 9.9% due to approximately 195K people returning to the job search (according to the NY Times article. This CNN article says:
The rise in the unemployment rate is actually a sign of improving perception of labor market conditions. The increase was due to an uptick in job seekers who had previously been discouraged and dropped out of the job market. There was a jump of 805,000 workers returning to the labor force in April alone.
Part of the problem is it takes 100K new jobs just to maintain the status quo and accommodate the new jobs needed each month. According to the NY Times article linked above,
With revisions on Friday, April was the fourth consecutive month that the economy added workers (a revised 230,000 jobs were added in March, instead of 162,000). Besides March, February was revised from a loss of 14,000 jobs to a gain of 39,000. With a January gain of 14,000, the cumulative increase came to 573,000 jobs in four months.
A little further on in the article is this:
More than 15.3 million were unemployed last month. There are still strains in the housing sector, pressure in financial markets, loss of wealth in households and big budget deficits.
And this again from CNN pointing out that the 290K:
... was the largest number of jobs added to the labor force since March 2006.
So lets look at those figures for a bit. Once again from the CNN article:
Looking ahead: Still, the gain in jobs this year has barely made a dent in the 8.4 million jobs that were lost in 2008 and 2009. And the 15.3 million unemployed workers are suffering a great deal. A record 46% have been out of work six months or longer.
The so-called underemployment rate, which includes workers who are discouraged and those who are working part-time jobs because they can't find full-time work, rose to 17.1%, the highest level in the 17 years that figure has been calculated.
So the official unemployment rate is 9.9%. Underemployment is at 17.1%. Forty-five percent of 15.3M unemployed have been out of work for six months or more.
Here's where we are. We need 100K jobs each month for status quo. If we maintain the status quo and can manage to create 190K more jobs each month (which is the largest amount created since March 2006 remember), it will still take 6.7 years to clear the unemployment rolls of today. Which means we still have the folks who are under-employed and those who have given up looking without new jobs. Also, if you read the articles from both CNN and the NY Times, you see that a lot of those "new jobs" are short term to support the census. Then we come to the folks who are now "self-employed" as contractors (linked in yesterday's post).
So cheer the "good news' from today's reports but recognize that there is a long way to go yet for all of us. Or at least, those of us who are still fighting to find the right job.
As always, any errors in the math presented here are purely the fault of the poster.