Let’s talk about unemployment. First of all, let me say if I could wave a magic wand, my command would be that the economy would turn around and businesses could afford to start creating jobs and the unemployment rate would fall to 4 percent overnight. That’s because if more people are working, it’s just better for everyone. There’s more money to spend. More stuff gets purchased. More stuff gets manufactured. Business – and life – just gets better for everybody, including newspapers. So yeah, I want the unemployment rate to fall – yesterday. But since I don’t have a magic wand, all I can do is be a bystander. And I can observe and write about my observations. So this week I was observing reports about unemployment ahead of Friday’s government report on April’s jobless picture. And I ran across a bit of a contradiction. In the Wall Street Journal, there was an article Thursday under the headline “Even After Jobless Claims, Jobs Picture Isn’t Pretty.” The WSJ also quoted Challenger Gray & Christmas. That’s an executive outplacement outfit that researches and tracks hiring. CG&C reported announced job cuts rose to 7.1 percent in April. That was an 11.2 percent increase over last April CG&C also noted that close to 25 percent of the cuts came from the education sector, which, according to WSJ, shows the public sector is dealing with its own debt problems. Summing things up, the WSJ noted the following: n Weekly jobless claims are sitting around 383,000, the four-week average. n ADP pegs April private-sector job growth at 119,000. n TrimTabs pegged April jobs growth at 116,000. n Announced layoffs are rising, as per Challenger, Gray. n Last month, the BLS reported 120,000 jobs were created in March. The Street expects that tomorrow, the BLS will report 168,000 jobs were created. n The official unemployment rate is 8.2 percent — the so-called U-3 — but everybody understands by now that numbers excludes millions who have either dropped out of the labor force, or can’t find full-time work. A broader measure, the U-6, is at 14.5 percent. Bottom line? People who don’t have jobs are still having a tough time finding jobs. The other troubling thing is that we are one crisis away – a Eurozone default or two, an oil shortage because of Middle East unrest – to things getting worse. Or. On the same day I read an Associated Press story under the headline “Steady Job Gains To Sustain U.S. Recovery.” Here’s the lead: WASHINGTON (AP) - Hiring through the rest of 2012 will lag the brisk pace set early this year. But it will be strong enough to push the unemployment rate below 8 percent by Election Day. It seems AP surveyed 32 leading economists. The concensus was a gradually brighter jobs picture – even despite higher gas prices, the Eurozone debt crisis and a weak housing market. The article gave a nod to the fact that Friday’s eagerly awaited jobs report could be worse than anticipated. But the economists think the recovery will manage to reduce unemployment to 7.9 percent by Election Day from 8.2 percent in March. Then they noted that falling jobless numbers would boost President Barack Obama’s chances in the fall election. Fair enough. Presidents generally get re-elected if the economy is on the upswing right before an election. The economists AP surveyed predict the economy will grow 2.5 percent this year, up from 1.7 percent in 2011 and expected job growth to average 177,000 a month from April through June and 189,000 in the second half of the year. “The job market is improving enough that consumer spending can grow at a moderate pace as opposed to an anemic pace,” says Phillip Swagel, a University of Maryland economist. “Businesses are finally confident enough to hire and invest.” So the WSJ and the AP are doing some pretty divergent reporting on the economy. The AP seems much more optimistic. My take on things – just intuitively and anecdotally from talking to people who own or operate businesses – is that everything seems a little stalled. Not really horrible, but not really moving forward or growing, either. I get the sense that businesses are reluctant to invest capital, buy equipment or hire people. I think they’re sitting on money instead of spending it. And as long as that’s the case, things will remain sluggish. The question is, why? Why aren’t businesses ready to get things rolling again? Maybe there’s too much uncertainty with regard to things like health care and government regulation. Maybe there are concerns about the U.S. deficit and how it affects foreign trade.I was thinking Thursday afternoon after reading those stories that something is going to have to change. Maybe it’s perceptions, or maybe it’s elected officials. But something has to change to put the economy on a path to strong growth. And then Friday’s numbers came out. The numbers showed that U.S. job growth slumped in April, pointing to a “sluggish economy that could tighten the presidential race.” And although the unemployment rate fell from 8.2 percent in March to 8.1 percent in April, it wasn’t a good sign. The drop came because more people gave up looking for work. Only 115,000 jobs were added in April. That’s less than March’s upwardly revised 154,000 total. It also marked a sharp decline from December through February, when the economy averaged 252,000 jobs per month. AP reports the percentage of adults working or looking for work has fallen to its lowest level in more than 30 years. Regarding the stories I read earlier in the week, I don’t know which news organization has the better crystal ball. But my sincere hope is that it’s the AP.
