People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013.
Credit: Reuters/Shannon Stapleton
U.S. job growth jumps, but shrinking labor force a blemish
WASHINGTON
The brightening outlook was, however, tempered somewhat by a sharp increase in the number of people dropping out of the labor force, which pushed the unemployment rate to a 5-1/2-year low of 6.3 percent. Wage growth also was stagnant.
Nonfarm payrolls surged 288,000 last month, the Labor Department said on Friday. That was largest gain since January 2012 and beat economists' expectations for only a 210,000 rise.
"It lends significant legitimacy to the positive tone in the wide array of post-February economic reports, which have all been consistently pointing to a significant pick-up in economic growth momentum this quarter," said Millan Mulraine, deputy chief economist at TD Securities in New York.
March and February's data was revised to show 36,000 more jobs than previously reported.
U.S. stocks briefly rallied on the report, which was later eclipsed by rising tensions in Ukraine. Stocks ended lower, while safe-haven bids pushed the yield in the 30-year U.S. government bond to its lowest level in more than 10 months.
The dollar was flat against a basket of currencies.
About 806,000 people dropped out of the labor force in April, unwinding the previous months' gains. That helped to push down the unemployment rate 0.4 percentage point to its lowest level since in September 2008.
The labor force participation rate, or the share of working-age Americans who are employed or unemployed but looking for a job, also fell four-tenths of a percentage point to 62.8 percent last month, slipping back to a 36-year low touched in December.
Overall, however, the data suggested the economy was gathering strength and led investors to pull forward their bets on when the Fed will start to raise interest rates.
The strong payrolls growth added to upbeat data such as consumer spending and industrial production in suggesting that sputtering growth in the first quarter was an aberration, weighed down by an unusually cold and disruptive winter.
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(Reuters) - Americans giving up the hunt for jobs were likely behind a sharp drop in the U.S. workforce last month, a bad sign for an economy that is struggling to achieve a faster growth pace.
The number of working-age Americans counted as part of the labor force -- either with a job or looking for one -- tumbled by 496,000 in March, the biggest fall since December 2009, the Labor Department said on Friday. That pushed the so-called workforce participation rate to a 34-year low of 63.3 percent.
March marked the second month in a row that the participation rate declined -- 626,000 people have dropped from the work force since January.
Friday's report showed a decline in the number of discouraged job seekers last month after a pop in February, which at first glance might suggest the drop in the workforce was mainly because of shifting demographics.
But a closer look at the underlying numbers raises questions about the notion that retiring baby boomers were the driving force behind the shrinking workforce.
"You have to think that it's a large part demographics, but demographics are not really going to have such a big effect on month-to-month changes," said Keith Hall, senior research fellow at George Mason University's Mercatus Center.
Of the nearly 500,000 people dropping out, just 118,000 were aged 55 and older, meaning more than three-quarters of the increase came from below-retirement-age adults.
Also, the number of people 65 and older counted as part of the workforce actually rose by 27,000, which followed a 72,000 increase in February.
Hall said the sluggish economy was forcing some older Americans to continue working to rebuild retirement nest-eggs that were shattered during the 2007-09 recession.
Indeed, the participation rate for Americans between 55 and 64 years old held steady at a relatively high 65 percent. On the other hand, participation by the 25-29 age group was the lowest since record-keeping started in 1982.
"People are just giving up the search for work. A lot of them would like to work and they aren't, that is a serious sickness in the economy," said Peter McHenry, assistant economics professor at the College of William & Mary in Williamsburg, Virginia.
The drop in participation helped to lower the unemployment rate by a tenth of a percentage point to 7.6 percent. If the workforce had not contracted, the jobless rate would have risen two-tenths of a percentage point to 7.9 percent in March.
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Discouraged job seekers behind shrinking labor force
WASHINGTON
People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013.
Credit: Reuters/Shannon Stapleton
(Reuters) - Americans giving up the hunt for jobs were likely behind a sharp drop in the U.S. workforce last month, a bad sign for an economy that is struggling to achieve a faster growth pace.
The number of working-age Americans counted as part of the labor force -- either with a job or looking for one -- tumbled by 496,000 in March, the biggest fall since December 2009, the Labor Department said on Friday. That pushed the so-called workforce participation rate to a 34-year low of 63.3 percent.
March marked the second month in a row that the participation rate declined -- 626,000 people have dropped from the work force since January.
Friday's report showed a decline in the number of discouraged job seekers last month after a pop in February, which at first glance might suggest the drop in the workforce was mainly because of shifting demographics.
But a closer look at the underlying numbers raises questions about the notion that retiring baby boomers were the driving force behind the shrinking workforce.
"You have to think that it's a large part demographics, but demographics are not really going to have such a big effect on month-to-month changes," said Keith Hall, senior research fellow at George Mason University's Mercatus Center.
Of the nearly 500,000 people dropping out, just 118,000 were aged 55 and older, meaning more than three-quarters of the increase came from below-retirement-age adults.
Also, the number of people 65 and older counted as part of the workforce actually rose by 27,000, which followed a 72,000 increase in February.
Hall said the sluggish economy was forcing some older Americans to continue working to rebuild retirement nest-eggs that were shattered during the 2007-09 recession.
Indeed, the participation rate for Americans between 55 and 64 years old held steady at a relatively high 65 percent. On the other hand, participation by the 25-29 age group was the lowest since record-keeping started in 1982.
"People are just giving up the search for work. A lot of them would like to work and they aren't, that is a serious sickness in the economy," said Peter McHenry, assistant economics professor at the College of William & Mary in Williamsburg, Virginia.
The drop in participation helped to lower the unemployment rate by a tenth of a percentage point to 7.6 percent. If the workforce had not contracted, the jobless rate would have risen two-tenths of a percentage point to 7.9 percent in March.
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