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A recipe for more jobs: Stronger economic growth

May 4, 2012 RSS Feed Print

It was the smallest gain in five months for both categories.

Leisure and hospitality, a bellwether for consumer spending, had its tiniest gain — 12,000 jobs — in eight months. Federal, state and local governments cut a combined 15,000 jobs.

There were two bright spots: Retailers added 29,300 jobs after cutting jobs the previous two months. And professional and business services added 62,000.

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YOUNG AND UNEMPLOYED

It's a tough time to be young in America.

The unemployment rate in April for workers under 25 was 16.4 percent. That's nearly 10 percentage points above the rate for those 25 or older.

It could be worse. You could live in Europe. In the 17 countries that use the euro, the unemployment rate for young workers is 22.1 percent.

Or worse still. In Greece and Spain, two of the countries most damaged by Europe's debt crisis, one in two workers under 25 is unemployed.

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REVISING HISTORY

The job market seems to look better with hindsight.

The Labor Department has revised job growth upward for 10 straight months — and for 18 of the past 21. Over the past 10 months, it's added 413,000 jobs to the original estimates.

The job figures are revised twice. They're updated in the two months after they first come out. And they're revised again in an annual update.

History shows that the updated totals typically follow the trend in job creation: When the economy is creating jobs consistently, the revisions tend to be positive. Months of job losses typically lead to negative revisions.

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THE POLITICAL DEBATE

A falling unemployment rate would seem to be good news for President Barack Obama's re-election hopes. Dating to 1956, no incumbent president has lost when unemployment fell in the two years leading to an election.

On Election Day, unemployment will almost surely be less than it was two years earlier: 9.8 percent in November 2010.

But for the past two months, the rate has fallen for the wrong reason: More than 500,000 Americans have stopped looking for jobs and are no longer counted as unemployed. Job growth averaged a healthy 252,000 from December through February. It slowed to an average of 135,000 in March and April.

The question is whether voters will focus more on the falling unemployment rate (good for Obama) or the modest job growth (not so good).

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A JAB FROM ROMNEY, A DEFENSE FROM OBAMA

Mitt Romney seized on the latter. He noted that the declining number of people seeking work explains the drop in the unemployment rate.

"This is way off from what should be happening in a normal recovery," Romney said on Fox & Friends. "You have more people dropping out of the work force than you have getting jobs."

"This is not progress," Romney said.

Obama pushed back.

He countered that businesses have added about 1 million jobs in the past six months. But speaking at a school in Arlington, Va., the president said "we're going to have to do more" to recover jobs lost during the recession.

"My message to Congress is going to be, 'Just saying no to ideas that will create new jobs is not an option,' " Obama said.

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RECOVERIES WITHOUT JOBS

Economists note that "jobless recoveries" are becoming the norm. In part, that's because layoffs during recessions are more likely to be permanent.

Workers who were cut during downturns before the 1980s were usually hired back once the economy perked up. This time, many jobs are being restored only slowly.

Companies are also quicker to lay off employees at the first sign of slowing growth. And as they find ways to squeeze more work from their remaining staffers, they're slower to rehire.

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DISAPPEARING WORKERS

The percentage of Americans 16 and older working or looking for work is now 63.6 percent, the lowest since 1981. For men, the so-called "labor force participation rate" is 70 percent. That's the lowest since the government started keeping records in 1948.

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Associated Press

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