The Ottumwa Courier

AP National

May 5, 2014

Five cautionary signs in April's US jobs report

(Continued)

"We do not yet have a jobs recovery that is strong enough to really pull people in," said Heidi Shierholz, an economist at the progressive Economic Policy Institute.

The number of people who began seeking work for the first time fell 126,000 from March to roughly 1 million. The figure for new grads and parents who began looking was even bleaker: Down 417,000 to 2.6 million.

If those 543,000 people combined had all started looking for work in April, the unemployment rate would be 6.6 percent — a dip from March's 6.7 percent, rather than the plunge to 6.3 percent.

NO HOUSING REBOUND

Builders added 32,000 workers in April. But just 41 percent of them were for constructing homes. That share is usually around 50 percent. The lower figure likely reflects how much housing has cooled this year after a solid improvement in 2013. Sales of new homes plunged 14.5 percent last month, according to the Commerce Department.

Friday's report suggested that homebuilding could remain sluggish.

"You see that in the hiring numbers," said Steve Blitz, chief economist at ITG Investment Research. "You see it in the borrowing numbers. And you see it in the value of private construction put in place."

HIGH SCHOOL GRADS AND DROPUTS LOSING OUT

People who've never been to college — about a third of workers older than 25 — are struggling. More than 200,000 high school drop-outs lost jobs last month. So did 276,000 high school graduates. This group isn't sharing in a recovery in which college has become practically a pre-requisite. Only 54.3 percent of high school grads either have a job or are looking for one. That's down from roughly 60 percent before the recession.

FLAT WAGES

Average weekly paychecks didn't budge in April. They were $838.70, exactly as in March. Stagnant pay could slow growth, since about 70 percent of economic activity comes from consumers. They can't ramp up spending unless their wages rise. "Firms are hiring again, but we still need wages to rise faster if the economy is to really accelerate," said Joel Naroff, president of Naroff Economics.

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