Podcast: The April Employment Report and What It Means for the Economy
I’m Michelle Bazie and I’m here with Chad Stone, the Center’s Chief Economist, to discuss the jobs report for April.
1. Chad, is there any encouraging news in today’s jobs report?
There’s a lot of good news about job growth and people becoming more encouraged about finding a job. But the bump in the unemployment rate to 9.9 percent is a reminder that the economic recovery has to get a lot stronger to make real progress toward lowering unemployment.
2. The Bureau of Labor Statistics reported that the economy created 290,000 jobs in April. That’s counterintuitive -- why did the unemployment rate go up if more jobs were created?
You’re right there is a stark difference here. What happened this month is fairly common in the early stages of a recovery when people who may have dropped out of the labor force during the recession start to come back in because they become more confident they can find work. Some of them find a job immediately, and that boosts employment. Others take longer to find a job and during the time they are looking they push up the unemployment rate.
3. Creating 290,000 jobs seems like really good improvement – Exactly how many jobs are needed to make a real dent in unemployment?
You need to create a certain number of jobs just to keep the unemployment rate from rising. It takes about 125,000 jobs a month to keep up with normal growth in the labor force, but it takes more than that when people are pouring back into the labor force after a recession. So, to really make a dent in unemployment, we would need to see sustained job growth of 200,000 to 300,000 jobs a month – like we had in April.
Unfortunately, forecasters don’t see that in the cards. Many expect the economy to slow in the second half of this year because the stimulus from the Recovery Act will begin to wind down and states will continue to address their budget crises with either spending cuts or tax increases that will act as a drag on the recovery.
4. What does this all mean for unemployed workers and are there things Congress can do?
Times are still hard for unemployed workers, almost half of whom have been unemployed for more than six months. The extent of long-term unemployment is unprecedented in the post-World War II period. Many of these long-term unemployed have exhausted their regular unemployment insurance benefits and are relying on the additional benefits provided by the Recovery Act passed last February. But that program is set to expire again. Congress needs to take steps to assure unemployed workers that they will continue to receive the help they need and to give the recovery a shot in the arm by passing a meaningful jobs bill.
5. What are these steps?
There are two critical provisions in the pending congressional jobs bills: One extends the Recovery Act measures that provide extra weeks of unemployment insurance and subsidized COBRA health insurance coverage for unemployed workers to the end of the year. The other provides additional fiscal assistance to states facing severe budget problems.
Thanks for joining me, Chad.