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Home Publications Blogs CEPR Blog Strong Job Growth Couldn't Push Unemployment Down in April

Strong Job Growth Couldn't Push Unemployment Down in April

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Written by Dean Baker   
Friday, 06 May 2011 10:30

Even though the economy created 244,400 new jobs in April, the unemployment rate returned to 9.0 percent, according to the Bureau of Labor Statistics' latest employment report. Last month was the third consecutive month of job growth in excess of 200,000, with an average of 233,000 per month. While the growth is encouraging, the rise in employment last month benefited from one-time factors that will not be repeated, such as job growth for retail and restaurants inflated by the later-than-usual Easter.

The April rise in unemployment was almost certainly just a measurement error that partially reversed the extraordinarily rapid decline reported in December and January. Over the last year, the household survey shows employment growth of just 764,000 (adjusted for the change in population controls). This compares to an increase of 1,313,000 jobs reported in the establishment survey. We should have expected labor force growth of roughly 1,000,000 over this period. This implies that the job growth we have seen should have only led to a drop in unemployment of 0.2 percentage points, not the 0.8 percentage point drop we actually saw over the last year.

For more information, read our latest Jobs Byte.

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