NC State’s Dr. Mike Walden – Was the Jobs Report Disappointing?
The latest national jobs report showed 115,000 net new non-farm jobs created last month. This resulted in a reduction in the unemployment rate from 8.2 percent to 8.1 percent. But 500,000 people also dropped out of the labor force. So was this a positive or a negative report? N.C. State University economist Mike Walden responds.
“It was both. … It was good that we added jobs. In fact we are now on trend to have added jobs over the last two and a half years virtually every month. So that’s a good sign.
“We, however, did see in that report that there was an increase in the number of people who are considered to be workers but who have stopped looking for work. They are not, therefore, counted in the unemployment rate … .
“There is a second unemployment rate that does count those folks as unemployed. And if we looked at that rate, it was unchanged in … (the) April report. I think the bigger concern, at least among economists, is the … fact that 500,000 people simply disappeared from the labor force. These would be potentially people who have retired, which is O.K., but what we worry about (is), Are there people out there who have simply given up and they simply only are not looking for work, they simply don’t want a job, because they’ve just become so despondent about the job market? I think that’s a concern.
“The bottom line here is that we lost about 9 million jobs during the recession. We’ve gained almost half of them back. So we have seen improvement, but we have a long way yet to go.”