290K Jobs Added in April; Long-Term Unemployment Climbs

By Donald Sears  |  Posted 2010-05-07

The addition of 290,000 jobs in one month is nothing to easily dismiss. April was evidently one of the best months for job gains in a very long time (the highest job gains in one month in four years). Professional and business services added 80,000 jobs, and computer systems and design added 7,000.

The unemployment rate rose from 9.7 to 9.9 percent. How does that happen as jobs are being gained?

According to experts, it is because you have more people looking for work than in March. "In April, the civilian labor force participation rate increased by 0.3 percentage point to 65.2 percent, as the size of the labor force rose by 805,000," wrote the Bureau of Labor Statistics. "Since December, the participation rate has increased by 0.6 percentage point."

One of the big issues, however, is the number of individuals still collecting unemployment insurance over the long term. Almost half of those on unemployment have been collecting for over six months or more. As the BLS wrote in its report on April job figures:

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up over the month, reaching 6.7 million. In April, 45.9 percent of unemployed persons had been jobless for 27 weeks or more.

But it's not only the matter of long-term unemployment, it's also a lack of meaningful growth in wages. As The New York Times pointed out:

Although the average workweek inched up to 34.1 hours, suggesting that workers are taking home slightly higher paychecks, actual hourly wages were up only 1 cent to $22.47 in April. Average hourly earnings were up 1.6 percent over the last 12 months.

Economists suggested that such anemic wages increases, if they were to slow any further, could contribute to a deflationary environment. And labor market specialists said they were concerned about what would happen as the effects of the government stimulus package winds down and unemployment benefits begin to run out.

So, yes, the job gains absolutely are good news, but the larger challenges in wages and good-paying jobs are still issues at the heart of the economic recovery. Key indicators to watch will be what happens to job figures in May and the coming months of summer.

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