The Labor Department's unemployment figures for the month of April are now out, and frankly, they look better than expected. The economy created 165,000 new jobs in April, and the official government unemployment rate dropped to 7.5% (from 7.6% in March). This marks the lowest unemployment rate since President Obama took office. That's great news, right?Well, not really. Let's take a little deeper look at these numbers. While 165,000 jobs were created, about 210,000 new people entered the labor market (going from 155,028,000 in March to 155,238,000 in April). That means there were not even enough jobs to cover the number of new entrants to the job market -- and it also means we are still not really making a dent in the millions of people who were laid off in the Bush recession.
So how could the unemployment rate have dropped (since there were more new entrants to the job market than new jobs created)? That is answered by a couple of different statistics. At least 21,000 more people joined the ranks of the marginally-attached workers (who are not counted as officially unemployed, even though they are still unemployed). And the number of part-time workers rose by 278,000. While this huge number of part-time jobs is not included in the 165,000 new jobs (because they are not full-time jobs), the workers who took those part-time jobs are no longer counted as unemployed.
It is the removal of those part-time workers and marginally-attached workers from the official unemployment figures that accounts for the drop in the unemployment rate. Are more part-time workers and more people dropping out of the job market because they have given up indicative of a healthy economy? Of course not. Those part-time workers can't even support themselves, let alone a family. And many of those who have given up after a fruitless search for a job will just add more numbers to federal and state social programs.
Here is a demographic breakdown of the officially unemployed:
Adult men...............7.1%
Adult women...............6.7%
Teenagers...............24.1%
Whites...............6.7%
Blacks...............13.2%
Hispanics...............9.0%
Asians...............5.1%
And here are the unemployment numbers:
Number of people in the civilian workforce:
155,238,000
Number of people counted officially as unemployed:
11,659,000
Official unemployment rate:
7.5%
Number of workers marginally-attached to workforce (and not counted as unemployed because they did not seek work in the last four weeks). This is undoubtably an undercount, but we'll accept the government estimate for now:
2,347,000
A more realistic unemployment figure (official count + marginally-attached):
14,006,000
A more realistic unemployment rate:
9.02%
Number of workers with part-time jobs because they can't find full-time work:
7,916,000
Number of unemployed and underemployed workers:
21,922,000
Percentage of workers either unemployed or underemployed:
14.12%
Obviously, we are still a long way from healthy economy (which would have less than 5% unemployed). I don't place all of the blame for the continuing unemployment on President Obama. He has tried to institute some job creation programs, only to have them killed by the congressional Republicans.
And the prospects for much improvement are not good, since austerity has been forced on the government by those same Republicans. The recent across-the-board drastic cuts to government programs are being incrementally put into effect, and while the effects of that were beginning to be felt in April, the effects of those cuts will be felt more severely in May and June.
Those cuts have taken millions of dollars out of the economy -- and will shrink the economy and depress demand (and depress job creation). How badly will the economy be hurt? We don't know for sure. We'll just have to cross our fingers and hope it doesn't result in negative GDP and job figures.
