By PAUL WISEMAN and CHRISTOPHER S. RUGABER
AP Economics Writers
(AP:WASHINGTON) One month of slower job growth might have been a blip. Two suggest a worrisome trend: The economy may be faltering again.
The United States generated just 115,000 jobs last month, well below expectations and the fewest since October. The unemployment rate fell to 8.1 percent, but for the wrong reason _ workers abandoned the labor force.
From December through February, employers added 252,000 jobs a month on average. But the figure dipped in March and dropped further in April, raising doubts about an economic recovery that can't seem to reach escape velocity.
The report Friday by the Labor Department indicated "an economy that is losing momentum _ especially on the jobs front," said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
It also dealt a blow to President Barack Obama's re-election prospects. His presumed Republican opponent, Mitt Romney, called the report "very disappointing."
Romney said the country should be adding 500,000 jobs a month and said any unemployment rate above 4 percent is "not cause for celebration." The rate has not been that low seen since the last days of the Clinton administration.
"We seem to be slowing down, not speeding up," Romney said on Fox News Channel. "This is not progress."
Obama, at a Virginia high school to promote a freeze on interest rates for student loans, focused on the six-month total of more than 1 million jobs created. But he said: "We've got to do more."
The 8.1 percent unemployment rate is the lowest since January 2009, the month Obama was sworn in.
Still, the weak job growth caused stocks to fall sharply on Wall Street. The Standard & Poor's 500 index lost 1.6 percent and closed its worst week of the year. The price of oil fell more than 4 percent because of fears of a slowing economy, which should mean lower gasoline prices soon.
Some of the slower job growth may be because an unusually warm winter allowed construction firms and other companies to add workers ahead of schedule in January and February, effectively stealing jobs from the spring.
The weaker job growth in March and April "looks like some weather payback," said Paul Ashworth, chief U.S. economist at Capital Economics.
The balmy weather probably exaggerated job growth in the winter and makes it look small now, Ashworth said. He expects job creation to settle into a lackluster range between 175,000 and 200,000.
The economy may not be growing fast enough to produce anything stronger. Economists surveyed by The Associated Press expect the economy to grow 2.5 percent this year. That is consistent with monthly job growth of only about 135,000, according to calculations by Brad DeLong, an economist at the University of California, Berkeley.
That is barely enough to keep up with population growth not nearly enough to recover the jobs lost in the Great Recession quickly. At this year's pace, it will take until May 2014 to restore employment to its 2008 peak of 138 million.
The United States has only recovered 3.8 million, or 43 percent, of the 8.8 million jobs lost between the peak, in February 2008, and January 2010.
David Boyce, 30, is one of those still looking for work. He lost his sales job two years ago and ran out of unemployment benefits in September. He and his wife, who is working reduced hours as a nanny, are struggling to get by.
"We lived off savings for a while," he said. "And now we're living off ramen noodles basically."
April's hiring slump was broad. Only two of 10 large categories tracked by the government, retailers and professional and business services, hired more workers in April than they did in March.
The categories of manufacturing and education and health services added the fewest jobs in five months. Hotels, restaurants and entertainment companies added the fewest in eight months.
Friday's report noted that that the average hourly wage went up one penny in April. Over the past year, average pay has increased 1.8 percent, almost a full percentage point shy of the inflation rate, which means the average American isn't keeping up with price increases.
Even April's bright spot, the lower unemployment rate, fades on closer inspection.
The government only counts people as unemployed if they're looking for work. And 340,000 Americans stopped looking and dropped out of the labor force in April, which is why the unemployment rate fell slightly. The dropouts mean just 63.6 percent of working-age Americans were working or looking for work, the lowest since 1981.
It has been almost three years since the Great Recession ended in June 2009. Economists say countries usually flounder for several years after a financial crisis like the one that hit the United States in 2008.
Damaged banks are reluctant to lend. Borrowers who took on too much debt in the good times change their ways, cut their spending and try to repair their finances. The economy grows slowly.
And after this financial crisis, the economy is trying to gather speed without two of the engines that usually help power economic recoveries: housing and government spending.
A housing collapse caused the crisis, and home construction isn't doing much to lead the way out. Housing hasn't contributed to economic growth since 2005, though a recent burst of apartment construction might change that this year.
Government hiring also normally boosts employment after a recession. Not this time. Cities, towns and counties, especially, have been cutting employment. Private employers have added jobs every month since February 2010, noted Gary Burtless, senior fellow in economic studies at the Brookings Institution. Over that same period, government payrolls have dropped by 500,000.
Local governments are beginning to recover some of the tax revenue lost in the recession and its aftermath. But government hiring hasn't started yet: 15,000 government workers, most of them in local schools, lost their jobs in April.
The recovery has one thing going for it: Even meager gains in jobs will feed on themselves and create growth that eventually becomes self-sustaining. The hiring leads to spending, which stimulates demand and leads to more hiring, which leads to more spending. The country has created 1.5 million jobs in eight months.
The economists AP surveyed said they believe the economy has entered such a "virtuous cycle." But they said they don't expect unemployment to reach a healthy level _ below 6 percent _ until 2015 or later.
Until then, many companies are likely to behave like the North American division of Philips, the healthcare and consumer products company. It is hiring, but more slowly than in years past.
The company is trying to fill 400 jobs, including 127 in Cleveland, where it has a plant that makes medical imaging equipment. Things are improving, said Cynthia Burkhardt, the company's vice president of talent acquisition. But "I wouldn't say that we're full steam ahead right now. Everyone's cautious about the economy."
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Associated Press writers Martin Crutsinger and Kasie Hunt contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Job Growth is a world wide problem & it ain't going away anytime soon! Cities & States going broke is not the Presidents fault,
its overspending! I see it in my State (Wyoming) which has a big short fall from a warm winter in the U.S. because we now have a lot of Natural Gas unsold. Our cities & state have already spend the money they were expecting from the Revenue of Natural Gas & now they are talking about lay-offs. And as far as OB care, When OB talked about Health care the American people thought it was going to be free, so now they see it ain't free, they don't want it anymore!
Hi David, (not the prophet), How can you say that job growth is not the President's fault but is due to overspending by our states? Our President does not even want a spending ceiling and has presented no budget. Have you missed the point that our federal government has overspent, and the interest we pay on our debt could overtake GDP if it is continued. Yes, OB spent the first year of his presidency passing the health care law while he should have been concentrating on the state of our economy. No one I spoke to expected his health care to be free; they expected it to destroy descent health care in our country.
Could the states be short revenue due to the housing bust? Give it a thought. Property taxes pay a huge part of a state, city, county budget - not natural gas revenues. Because of the lack of restraint in providing loans, due to Clinton's "everyone should own a home," mantra, homes in the multiples were sold to people who could not pay for them and our housing boom turned to a housing catastrophe. One last point, President Bush tried to regulate Fannie Mae and Freddie Mac, but the democratic run Congress would not pass any harsh regulations.
There ain't a President alive who can fix our problems! For we are a nation doomed for destruction. Our Sins are out of control & our leaders make Laws that God Hates. As the Good lord said he would come in mylifetime also I heard we have bad times coming "back in Sept. 2001". I heard again in Oct. 2011 (nothing will be worth nothing) & Oct. 28th. On that day Israel put the Star of David on their flag in 1948. Which means we are in the last 7 years of the Prophesy of Daniel. As for nothing will be worth nothing, the Beast will rise up & you can't buy or sell unless you have the mark on your hand or forehead. "And were worried over who is going to be President"
Hi David, Totally agree that our nation's sins are out of control and laws are being passed that are not according to God's will.
However, Revelations was written for the people living at that time. They needed the encouragement and the joy that would come because of the death and resurrection of Jesus Christ. Christians were being persecuted during the writing of the Book of Revelations. They needed to hear those words and be assured of their joy through Christ. John's style of writing was symbolic so that the Romans (the Beast) would not know they were the ones about whom the Book was written.
The destruction of Israel took place in 70 A.D. Jesus said no one will know the hour of his coming but to always be prepared.
The Jews broke Gods Ten Commandments & thought the blood of a animal sacrifice forgive them of there sins. So they never quit sinning. The Christain
breaks Gods Holy Commandments & thinks to he is justisfied by the Righteous blood of Jesus, so they to keep breaking Gods Ten Commandments to. Who's more Righteous! As the scriptures say in the end time Satan will be sitting in the church. Why, because he has convinced Christains, Gods Holy Commandments have ended. So now everywhere Preachers preach the Law Of God has ended. In the book of Hebrews it says Moses first preached the Gospel to the Israelites & Paul said it is the same Gospel preached today! Also Moses warned of the Great Tribulation at the end of the world, as did other Phophets. Caused by, Not keeping Gods Ten Commandments, Statutes & Judgements for Righteous living on this earth. The Good Lord told me 15 Years ago to leave the Church I was attending, that another one would come. Soon The everlasting Gospel will be Preached. Thou the Gospel is as old as time the message remains the same. As far as 70 AD it happen, but Jesus said when those things happen it would be the last Generation. So it has not happen yet! "Do you see any 1900 year old people walking around" You heard the old fable the Old Testament was only for the Jews. But the Jews Married Gentile women, which makes some of us heirs of the promise God made with his people for 1000 Generations to those who obey his Commandments! This is the last generation, there will not be a 1001.
last I knew jobs had nothing to do with the price of oil - it's the economy stupid...
Docs don't like Obamacare. I think I read that 30-50% were considering early retirement, leaving the field or leaving the country. You can get real good care with US board certified docs in a couple of Panamanian hospitals right now. Also a slow down in medical school candidates. They may get the same quantity but the quality may be down.
The only booming industry right now is the manufacture and sale of guns. Check out stocks like Ruger, S&W, Glock etc.
Hi Mike, I have a relative in the medical field, and had forgotten how doctors feel about OB care. So you are right.
I have been looking at Ruger lately; it's been doing very good. Gee, wonder why.
Very good article, Jeremy. The most telling about the slow recovery is the lack of increased hiring in the health field. There are so many aging baby boomers who are adding to the need for health care, plus the growing obesity in our country. If we were in recovery, doesn't it make sense that this would be the largest growing sector? Are people so broke they can't afford to go to the doctor any more?