are facing an exceptionally tough job market and the unemploy- ment rate edged up to 9.9 percent in April as the labor force in- creased sharply. The story for those out of work and seeking em- ployment continues to be worse than ever recorded since 1967 when the Bureau of Labor Statistics began examining how long people stay unemployed. The typical worker is taking a record 21.6 weeks to find a new job and a record 45.9 percent of those out of work have been unemployed and pounding the pavement in search of a new job for at least six months. 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. More people searching for work raises the unemployment rate.
In April, the labor force participation rate rose by three-tenths of a percent as 1.5 million have entered the labor force. Over the past three months, labor supply has risen by half a percent—the largest three-month increase since 1989. But really, this a story about male workers: Labor force participation among adult men
has increased by 0.9 percentage points over the past three months—the largest three-month gain on record since 1953. Nominal wages for production and nonsupervisory em-
ployees grew by an annualized rate of 1.7 percent over the past quarter, while the Consumer Price Index, which measures changes in prices, rose by 2.4 percent. Thus, while workers’ wages are rising, they are not keeping pace with inflation, which is typical in periods of high unemployment. We will likely not see strong wage growth until the unemployment rate comes back down. Clearly, today’s report is good news. The American Re-
covery and Reinvestment had 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 more than 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 impro- ving. But the challenge of job creation is not yet behind us.
Heather Boushey is a Senior Economist at the Center for American Progress.
The Black E.O.E. Journal
www.blackeoejournal.com
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