Sober toast for a strong April jobs report

FILE - In this Thursday March 13, 2014, file photo, job seekers line up to attend a marijuana industry job far in Downtown Denver. The government issues the March jobs report on Friday, April 4, 2014. (AP Photo/Brennan Linsley, File)
FILE - In this Thursday March 13, 2014, file photo, job seekers line up to attend a marijuana industry job far in Downtown Denver. The government issues the March jobs report on Friday, April 4, 2014. (AP Photo/Brennan Linsley, File)
Posted: May 04, 2014

While she's been at college, senior Stefanie Lechner, 23, has been watching the economy.

"It doesn't frighten me," she said Friday, less than two weeks away from graduation from Temple University.

Maybe it's because of Friday's champagne-popping report from the U.S. Labor Department - an unemployment rate of 6.3 percent in April, the lowest since September 2008, when it was 6.1 percent, and a not-shabby payroll expansion of 288,000 jobs.

That being said, Lechner, graduating with a degree in therapeutic recreation, will soon begin an unpaid internship - a career step she believes will lead to full-time employment in the same organization by year's end.

"It's a great opportunity," she said. Of her three best friends, two have jobs in their fields; the third is heading to graduate school.

Five years ago, the situation was completely different. Instead of 288,000 jobs gained, the economy lost 684,000 in April 2009 - a faint improvement from March 2009, when 826,000 jobs were lost.

Also worthy of a toast: Except for the publishing and motion-picture information category, every major category of jobs showed expanded hiring during March.

"The timing of this report couldn't have been better if you're about to graduate college," said Joe Weinlick, vice president of marketing at Beyond.com, a King of Prussia-based, behind-the-scenes operator of job boards in many industries and many geographies.

"If I was graduating college today, I'd feel a lot better than those who had graduated in the past three or four years," Weinlick said.

Finally, it appears that the economy has kicked aside its winter doldrums.

"No doubt . . . a portion of these gains were attributable to a catch-up from this winter's poor weather, but the employment gains in many service industries not affected by the weather confirmed the underlying health of the economy," said Doug Handler, chief U.S. economist with IHS Global Insight.

When it comes to champagne, however, pour a tall flute and stick a cork in the rest of the magnum. Here's why:

The number of unemployed remains high: 9.8 million, with 3.5 million, or 35 percent, unemployed for more than six months. Because Congress has not extended emergency job benefits, many people, even those out of work for seven months, are in dire financial straits.

(On Tuesday, several long-term unemployed people from Philadelphia will travel to Washington to testify to the Democratic House leadership about how Congress' reluctance to extend extra unemployment benefits has affected them, along with two million other unemployed Americans. Extra unemployment benefits ended Dec. 28. Laid-off people eligible for unemployment insurance can now expect to receive the minimum, 26 weeks' worth of benefits.)

The 6.3 percent unemployment rate, while lower, also reflects a drop in the labor force, which declined by 806,000 people. A labor-force drop often suggests a lack of confidence in the job market.

And the participation rate - the percentage of working-age people either working or looking for jobs - was 62.8 percent in April, a 36-year low, unmatched since March 1978.

In December 2007, when the recession began, there were 138,350,000 payroll jobs. It would take 98,000 more jobs to get back to that number - a goal that could be achieved next month, given the consistent job growth since October 2010.

Even then, it will take 7.7 million more jobs to make up for those that normally would have been created during the period to accommodate the growth in the working-age population.

"There aren't jobs unless you know somebody," said Temple University senior Rebecca Pendergrass, 22, who will graduate after majoring in sociology and Spanish.

So far, she hasn't heard from any place to which she has applied, and she imagines she'll have to return for a graduate degree to get a career job.

In April, 32,600 jobs were added in bars and restaurants - one of the largest gains among the sub-sectors of jobs, topping gains in engineering, manufacturing, construction, and health services.

The gain in bar and restaurant jobs adds credence to reports that much of the job growth has come in low-wage occupations.

"The low-wage job creation that characterized the early recovery has persisted deep into the nation's rebound," Christine Owens, executive director of the National Employment Law Project, said in a statement.

"It is clear that firms are hiring again, but we still need wages to rise faster if the economy is to really accelerate," wrote Joel Naroff, chief economist with Naroff Economic Advisors in Bucks County.


jvonbergen@phillynews.com

215-854-2769

@JaneVonBergen

www.inquirer.com/jobbing

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