The Department of Labor reported that the economy added 290,000 jobs in April, which is the largest one-month gain since March 2006. Payroll jobs in February and March were also revised upward so that over the past three months the economy has added an average of 186,000 new jobs per month.
While the federal government continued to ramp up staffing to conduct the U.S. Decennial Census, hiring 66,000 workers, the bulk of job gains were in the private sector and widespread across industries.
This pace of job creation is certainly good news. Last week, we learned that the economy grew by 3.2 percent during the first quarter of 2010 and today’s data show that this growth is beginning to pull the labor market out of its slump. We need to continue to see job creation at April’s pace to work toward recovering the 7.8 million jobs lost over the course of this recession and create enough jobs for new labor market entrants due to population growth.
But while a number of positive indicators point to stronger employment gains moving forward, there are a number of trends pointing to the need for continued focus on policies to pave the way for sustained job creation.
One looming challenge is that state and local governments are struggling with lower revenues brought on by high unemployment, which is leading them to slash budgets, and they laid-off another 6,000 workers last month.
Since state and local governments account for one-in-seven U.S. workers, we need to make sure that states do not drag down growth by continued lay-offs in the months to come for the recovery we are in to be a strong one. The Local Jobs for America Act, introduced by Rep. George Miller (D-CA), would create approximately 1 million jobs by providing $100 billion in funds to be used over two years to protect state and local government jobs and create local government and nonprofit sector jobs.
On the positive side, manufacturing added 44,000 jobs last month—more than double the jobs added in March. The economy has not added this many manufacturing jobs in any single month since 1998.
Certainly, one month’s data does not indicate a revival of U.S. manufacturing, but this is a positive indicator that the recovery is taking hold in the private sector and spurring the kind of economic growth that leads to job creation. Overall, the private sector has added 523,000 new jobs in 2010. The economy has added 614,000 new jobs overall in 2010 once we include government employment.
The economy also saw a large increase in the number of people reentering the labor market in search of work in April on top of these long-term unemployed who have been actively searching for a new job. This tends to happen as the economy begins peeking out of a recession and those who had become frustrated with their job search and “dropped out” of the labor force start looking for work again. Now that firms are beginning to hire again, people are reentering the job market. The share of the unemployed who are reentering the labor market after a spell not working or seeking work is now 24.7 percent, up from 21.9 percent in December.
Clearly, today’s report is good news. The American Recovery and Reinvestment has been credited with saving or creating 2.2 to 2.8 million jobs and added the boost that got the private sector hiring again. But there are still 15.3 million people who are unemployed and actively seeking work.
And even if we add jobs every month at this month’s pace, it will take us over four years to put each of these workers into a job, and that doesn’t even take into account our growing population. There is growing optimism that the economy is moving on the right track, with 45 percent of Americans reporting that the economy is already improving. But the challenge of job creation is not yet behind us.
