JOBS - Ebb and Flow in Job Growth

WHAT?! Why would ANYONE expect jog growth NOT to ebb and flow??? It always does even in a normal economic environment, much less today's. It's hard, but the sky is not falling folks.

"Reasons Abound for Ebb in Job Growth" by CATHERINE RAMPELL, New York Times 5/4/2012

Excerpt

The nation’s employers are creating jobs at less than half the pace they were when this year began, according to a government report released Friday.

The addition of just 115,000 jobs in April was disappointing, but economists urged no panic just yet. Maybe the unusually warm winter had encouraged companies to do their spring hiring a little early, they offered in one of several theories. Maybe high gas prices, now falling, temporarily discouraged job growth. Better yet, maybe this latest report understates how many jobs were added, since the initial estimates for earlier months have been revised upward.

But no matter which hopeful explanation you choose, America’s 13.7 million jobless workers still look pretty discouraged.

Many economists had been predicting that strong job growth early this year would persuade many people sitting on the sidelines to re-enter the job market.

Instead, for reasons that are unclear, workers continue to peel off the labor force. An estimated 342,000 Americans dropped out of the job market altogether in April. That is why the unemployment rate fell to 8.1 percent from 8.2 percent — not because more workers found jobs, but because so many people left the work force.

It’s just one month of data, and the survey numbers are not precise. Still, the figures fit into a longer-term trend.

The share of working-age Americans who are either working or actively looking for a job is now at its lowest level since 1981, when far fewer women chose to do paid work. The share of men taking part in the labor force fell in April to 70 percent, the lowest figure since the Labor Department began collecting these data in 1948.

The decline in labor force participation is partly because baby boomers are hitting retirement age. But economists had expected the wave of retirements to be at least partly offset by the number of workers rejoining the labor force as the economy improved.

“There were a lot of younger people who had gone back to school to get more education and training, and we thought we’d see more of them joining the work force now,” said Andrew Tilton, a senior economist at Goldman Sachs. Instead, the number of young people in the labor force also fell.

“May, June and July — the months when people are typically coming out of schooling — will be the big test,” he said.

College enrollment, particularly among young women, has indeed been growing quickly, which bodes well for the economy in the years ahead. But of course not everyone dropping out of the labor force is doing so to collect more credentials.

With the average duration of unemployment now at an interminable 39.1 weeks, many people have simply given up looking for work. Many of them might have given up months ago, but had clung to the job search because doing so kept them eligible for extended unemployment benefits. As more and more workers roll off those benefits, they are officially stopping their job searches and dropping out.