Labor participation rate falls sharply in March while unemployment rate shrinks
The good news is that the economy gained 288,000 jobs last month. The bad news is that the labor force participation rate fell back to 30 year lows while wages remained flat.
The "official" unemployment rate dropped to 6.3% from 6.7% in March.
The report is the strongest sign yet the economy has stabilized since December and January, when the recovery nearly halted in the face of snow storms and severe cold.
It also could reassure Federal Reserve officials the economy is on solid footing as the central bank gradually winds down its bond-buying program. The Fed cut its monthly purchases by another $10 billion this week to $45 billion as central bank officials said the economy appears to be strengthening.
Gross domestic product grew at an annual pace of 0.1% in the first three months of the year, the Commerce Department reported this week.
Job growth averaged just 114,000 in December and January, half the pace of growth from August through November. But it has now recorded three consecutive months of job creation above 200,000.
Many economists expect GDP growth to exceed a 3% pace in the current quarter, and Friday's report will likely bolster those expectations.
Friday's report offered signs of progress.
The private sector provided the bulk of job growth, with firms adding 273,000 jobs. But government jobs also grew, by 15,000, a sign years of budget cuts have given way to at least some growth.
To be sure, the labor market remains sluggish. The jobless rate is still historically high, above the roughly 4% to 5% rate in the months before the recession. The share of working-age Americans in the labor force—meaning those in jobs or actively looking for work—fell back to a three-decade low last month, now standing at 62.8%.
Wages were flat in April. The average hourly wage for private sector workers was unchanged at $24.31—just 1.9% above the year-earlier level. The average workweek was also unchanged at 34.5 hours.
Employment was flat in manufacturing which indicates that good paying jobs are still hard to come by. That may change as several indicators point to the manufacturing sector picking up steam in the months ahead.
Another "it could have been worse" report with the bright spot being the number of jobs being created. But stagnant wages and a drop in the labor force participation rate shows we have a long way to go to recover from Obama's policies.