The U.S. Labor Department announced today that the economy added 244,000 new jobs in April though the unemployment rate remained at 9.0 percent. More people entered the job market in anticipation of an economic uptick, which kept the unemployment rate at nine percent. In April 64.2 percent of adults were either working or looking for a job. This is the lowest labor participation rate in a quarter century according to the New York Times.
The good news has plenty of down side as 13.7 million people were out of work in April and 5.8 million were out for six months or longer.
Economists worry that the recent rise in the cost of energy might curtail to job increases that have been all but predictable so far this year. Higher energy costs cut numerous ways. They increase the price of many things making people reluctant to make purchases because they expect a future lessening. But higher fuel costs sap a budget’s purchasing power leaving demand unfulfilled or destroyed.
The recent easing in the crude oil futures market may indicate lower future prices. The economy could get into a short-term cycle of boom and bust as energy prices fluctuate. Economic activity and petroleum costs would move in opposite directions and result in a whipsaw effect in the economy.
A Beagle Research Short Poll during December shows that a large majority of Beagle Research readers believe that the economic recovery has started. Eighty percent of those polled say they believe that a recovery has begun. The strong showing confirms important data announced by the U.S. Labor Department on Friday.
According the Labor Department the U.S. economy added 103,000 jobs in December bringing the unemployment rate down to 9.4 percent. Jobs are traditionally a lagging indicator.
Most importantly this was not a one-time event. October and November each showed upticks in employment and the revisions announced at the same time as the December numbers paint a story of improving jobs growth through the fourth quarter. The revisions looked like this—October: from +172,000 jobs to +210,000; for November +71,000 from +39,000.