Jobs Report Mostly Positive, Wall Street Reacts; Rumbles of Discord over Eurozone Austerity
- May 06, 2013
The headline numbers from the Bureau of Labor Statistics – a net of 165,000 new jobs in April, and upward revisions for the previous months – were well received on Friday, especially by investors. But there was other data tucked into the report, some hopeful, some less so.
One bit of positive news concerned the long-term unemployed, referring to those who have been out of work more than 27 weeks, but who are still looking for work. In April, the number of long-term unemployed declined by 258,000 to 4.4 million, and their share of the unemployed declined by 2.2 percentage points to 37.4 percent. Over the past 12 months, the number of long-term unemployed has decreased by 687,000, and their share has declined by 3.1 percentage points.
On the other hand, the civilian labor force participation rate was 63.3 percent in April, unchanged over the month, but down from 63.6 percent in January. That’s the lowest rate since the late 1970s, when the economy was likewise sluggish, and means that more people than ever have quit looking for work.
People leaving the labor force was one reason the official unemployment rate was down in April from 7.6 percent to 7.5 percent, though job gains account for some of the drop. The BLS’ U-6 measurement of unemployment, which counts the regular unemployed, plus discourage works, plus everyone marginally attached to the labor force (such as those with part-time work, but not by choice), was 13.4 percent in April, down from 13.9 percent in March and 14.1 percent a year earlier.
Some industries were hiring in April, such as professional and business services (up 73,000), retail trade (up 29,000) and healthcare (up 19,000). Employment changed little over the month in construction, with small movements in the residential and nonresidential components. Construction has gained an average of 27,000 jobs per month over the last six months.
Rumbles of Discord over Eurozone Austerity
Over the weekend, the European Commission said that France could have two more years to meet its budget deficit target, which the country has been unable to do because of slow economic growth since the return of recessionary times to the eurozone. French Finance Minister Pierre Moscovici announced on the radio that “the end of the dogma of austerity” was at hand.
Not everyone agrees with that assessment, however, especially German lawmakers, who have been insisting lately that France meet its budget targets by next year. For now, however, the eurozone policy seems to be mostly stuck in neutral, awaiting the outcome of German elections in September.
Wall Street reacted enthusiastically to the positive jobs numbers on Friday, with the Dow Jones Industrial Average spiking beyond 15,000 for the first time ever, though it didn’t close that high, gaining 142.38 points or 0.96 percent. The S&P 500 was up 1.05 percent and Nasdaq was up 1.14 percent.