The labor market was able to bounce back from its lackluster growth the previous month by adding 211,000 new jobs in April, according to a federal report Friday.
President Donald Trump entered office at a time of relatively strong job growth. The labor market later slowed to a crawl by adding only 98,000 new jobs in March. The Bureau of Labor Statistics found in its latest jobs report that the labor market growth bounced back by adding 211,000 new jobs.
“Total nonfarm payroll employment increased by 211,000 in April, and the unemployment rate was little changed at 4.4 percent,” the jobs reported states. “Job gains occurred in leisure and hospitality, health care and social assistance, financial activities, and mining.”
The economy has been in a good position when in comes to the unemployment rate. It has even remained close to full employment. The economy still faces some lingering issues from the recession despite trending in a positive direction overall.
“The unemployment rate is pretty low,” Orley Ashenfelter, a professor of economics at Princeton University, told InsideSources. “The labor market is very good from that point of view. The problem with it is, the pay is so horrible.”
The jobs report found average wages increased by seven cents to $26.19 in the month of April. Ashenfelter warns wage growth has been concerning for decades. The Pew Research Center found in a 2014 report that wage growth for most workers has flat-lined since 1964 when adjusted for inflation.
“It’s been dismal for many decades,” explained Ashenfelter. “I would say people mischaracterized the labor market. Getting jobs is not the problem, there are tons of jobs. The problem is they don’t pay very well.”
The labor force participation rate and underemployment have also been a point of concern. The participation rate tracks the number of employed and those actively seeking work as a percentage of the total population. Workers experiencing underemployment are stuck in part-time positions or can’t find roles that match their skills.
The participation rate has declined rapidly in the decade since the last recession. The concern by some is that too many working age adults are among those who have dropped out. Trinity College Prof. Josh Stillwagon contests the participation rate shouldn’t be as big a concern since most of the decline is due to retirees and student adults.
“There is too much focus on labor force participation,” Stillwagon, who teaches economics, said. “These numbers are skewed by the fact that you have baby boomers retiring now and more young adults attending college. It is better to look at the employment-to-population ratio for prime age workers.”
The employment-to-population ratio for prime age adults has shown steady growth since the recession. The ratio dropped from 81 percent of the population to 74 percent when the recession hit. It is approaching where it was before the recession.
“I do worry about underemployment though,” Stillwagon said. “There have been a large number of part-time workers, which was a serious concern, but that is less so the case now. There is also a worry of underemployment in the sense of workers entering jobs below their qualifications.”
The Gross Domestic Product (GDP) has also seen disappointing growth recently. GDP tracks the total dollar value of all goods and services produced over a specific time period. The Bureau of Economic Analysis (BEA) found in its advance estimates April 28 that it only increased by 0.7 percent annual rate in the first quarter of 2017.
Trump likely won the presidency in large part to his renewed focus on the working class. His stance on some critical labor issues even helped him to secure many traditionally blue districts. Gallup found economic confidence has increased significantly since election night.
The leisure and hospitality sector saw the most significant increase of new jobs at 55,000. It was followed by health care and social assistance, professional and business services, financial activities, and mining. The jobs report does not include farm workers, private household employees or nonprofits.
