April’s employment report had little good news for the Obama Administration. Job growth was weaker than expected for the second consecutive month, and though unemployment slipped to 8.1%, the larger number of unemployed and underemployed (what the bureaucrats call U6) remained stuck at 14.5%.
And the main reason the headline unemployment number came down was lower workforce participation. Long-term unemployment benefits ran out for more people, and in a continuing trend, baby boomers are taking early retirement. Both of those groups simply disappear from the statistics.
But there are some glimmers of hope.
First, we continued to see decent jobs growth in manufacturing, health care, leisure and hospitality, and professional and business services. Transportation and local governments shed jobs.
Second, the private sector added jobs for the 26th consecutive month, and more than four million new jobs have been added during that time. The pace is slow, but at least there’s a plus rather than a minus in front of the numbers. And in revisions, 53,000 more jobs were created in February and March than the government previously estimated.
Third, the unemployment rate is lower, no matter how it got there. Eight percent is the magic number for the president’s re-election team, and we have six months before the election to get under that, and we probably will, barring a war with Iran or a collapse of Spain or another big European country. And if the decline in gasoline prices continues, expect consumer spending and jobs growth to pick up.
If official unemployment is in the 7.5%-7.8% range by Election Day and private sector jobs growth continues, President Obama may actually start talking about his record on the economy rather than just attack his likely opponent, former Massachusetts Gov. Mitt Romney.
Also, though nobody’s talking about it, the US is doing well compared with the rest of the developed world, at least in GDP and jobs growth (though Australia, Germany, and the Netherlands have much lower unemployment rates). The financial crisis and subsequent de-leveraging put Spain, the UK, and us into much deeper trouble than the rest of the developed world, and any recovery naturally will be slow.
I don’t want to give the president too much credit for this: His stimulus plan was better than nothing, but it could have done a lot more had it been better constructed. The fact is, the whole world is living through structural problems that will take a few years to overcome.
That’s a tough argument to make to voters—as French President Nicolas Sarkozy is likely to find out Sunday—which is why the president has to hope for better reports than this one in the months ahead.