As Job Growth Continues, Focus Turns to Speed of U.S. Recovery

The April jobs report showed healthy gains Friday, but also a rise in the unemployment rate. U.S. markets rose sharply in early trading, but surrendered most of their gains later in the day. Judy Woodruff takes a closer look at the latest jobs numbers with New York Times' David Leonhardt, a recent winner of the Pulitzer Prize.

Read the Full Transcript


    After a week of Osama bin Laden, the economy moved back to the top of the news today. The April jobs report shows healthy — showed healthy gains, but also a rise in the unemployment rate.

    President Obama talked up the report during a day trip to the Midwest.


    Today, we found out that we added another 268,000 private sector jobs in April.


    The president plugged that good news from the jobs report at an auto transmission plant in Indianapolis.

    The gain in private sector jobs was based on a survey of businesses by the U.S. Labor Department and it was stronger than expected. It also offset the loss of 24,000 government jobs, mostly at the local level. That made a net gain of 244,000 jobs nationwide in April.

    In fact, the economy has now added more than 200,000 positions for three months in a row, the best period in five years, all of which had the president saying, we are regaining our footing.


    The fact is that we are still making progress. And that proves how resilient the American economy is and how resilient the American worker is, and that we can take a hit and we can keep on going forward.


    But a separate Labor Department survey of American households found the unemployment rate ticked up to 9 percent in April, from 8.8 percent in March. It was the first time the rate had risen since last November.

    And the number of underemployed Americans rose to 15.9 percent. With that in mind, the head of the federal Bureau of Labor Statistics, Keith Hall, counseled caution today at a congressional hearing.

    KEITH HALL, Bureau of Labor Statistics: We haven't yet seen some things that we would like to see in a strengthening recovery.


    Republican House Speaker John Boehner went further. He issued a statement, saying, "While any improvement is welcome news, job growth in America is still nowhere close to what it should be."

    Still, there were signs this week of economic momentum, rising retail sales and factory output. And that could give hope to the 13.7 million Americans still unemployed.

    The jobs report initially sent Wall Street sharply higher. But as the day went on, the stock market gave back most of those gains. The Dow Jones industrial average gained 54 points to close above 12,638.The Nasdaq rose more than 12 points to close at 2,827.For the week, the Dow lost 1.3 percent; the Nasdaq fell 1.6 percent.

    And we take a closer look at the jobs numbers now with David Leonhardt, economics writer and columnist for The New York Times. His work won a Pulitzer Prize last month.

    And congratulations for that, David.

  • DAVID LEONHARDT, The New York Times:

    Thank you. Thank you.


    It's good to have you back with us.

    So, should we be more encouraged or more worried as a result of this report?


    I would say encouraged. I mean, a lot of it depends on what your expectations were coming in.

    I was concerned that this could be a disappointing report because we have had a series of disappointing reports over the last six weeks or so. Oil prices are rising. We still have debt problems in Europe. And so I think there was some reason to worry that the slowdown in economic growth in this country, which has undeniably happened over the last few months, would translate to less hiring.

    And instead, although we don't have a huge burst of hiring, hiring has continued to pick up speed. So, I think this was more good news, certainly, than bad news.


    But you still have the naysayers out there focusing on the fact that the unemployment rate went up, based on this other survey of households. Help us understand that discrepancy.


    Yes, it's really confusing.

    I mean, reporters all over the country today, I think, were trying to write stories that explain both of these things. And it is hard, because there actually is no good explanation for both of these things. The Labor Department conducts two different surveys. One produces the job growth estimate, the 244,000 new jobs last month. And one produces the unemployment rate. And there's no way they can both be right for last month. Over a longer term, they could both be right, but there's no way they can both be right last month.

    And so what's happening is, the Labor Department goes out and asks people, are you working? That produces the unemployment rate numbers. They also ask businesses, how many people do you employ?

    That second survey, the survey of businesses, is much larger. And so, when in doubt, we should believe it over the household survey. And most economists do believe, in fact, that, last month, it was right, and that the rise in the unemployment rate is really just a catchup. The unemployment rate fell artificially quickly in the last few months.




    And so you can think of this as sort of a correction.


    So you are saying don't spend a lot of time trying to reconcile these two…


    No, they are not reconcilable. That is exactly right.

    There is — some months, you can say, oh well, the unemployment rate went up because more people flowed into the labor force. When you dig into the numbers that is not actually what happened last month. So, there is no story that makes both of these things true for last month.


    Take us, David Leonhardt, a little bit inside these numbers. What do we see here? Where are jobs growing, in what sectors, what groups of people?


    That is another reason for optimism. The Labor Department has a set of industry categories — categories. And every one of them added jobs last month, with one exception. The exception was the government.

    Manufacturing added jobs. Retail added jobs. Health care added jobs. This category called information added jobs. The government cut jobs. And that's mostly because of cuts at the state and local level. They're grappling with budget deficits. Most of them have rules that say they must balance their budgets. And the way they do that, in part, is by cutting workers.


    And again, just to get back to these, I call them naysayers, people who are still looking at the glass as half-full, you know, they will still say, well, the growth in the last quarter was weak. They will point out that, you know, you had surprisingly high jobless claims…




    … coming out just yesterday. They will talk about manufacturing slowing down.

    Why aren't those things a counterweight to some of what you are seeing?


    They are to some extent. I will happily do two-bits of nay-saying myself here.

    The first would be that we do see some worrisome signs. You mentioned the jobless claims numbers. That is a much narrower survey than this monthly employment report, but it's also more recent. So, this monthly employment report basically refers to mid-April.

    Some of these weekly jobless numbers go into late April. And they do look worrisome. Now, maybe they will just end up being a blip, because, again, it is narrower, but maybe not. Maybe, in fact, next's month report will be bad because of the reasons we talked about, the high oil prices, the debt problems in Europe, the state and local budget cuts.

    So, I think the first reason to be worried is that we still could have a real slowdown this spring, the same way we did last spring. The second reason to be worried is, no matter what, we have such a long, long way to go in order to get back to anything that looks like a healthy economy. And at the rate of 240,000, 250,000 jobs a month, we are not going to be there in years.


    Which makes folks who look at these numbers say, well, yes, we can cheer for a day or two, but the long run still looks grim for so many people.


    That's right.

    And, so, to the extent that we really want to have hope that things could be improving, it's not how much job growth we had last month. It's that the amount of job growth continues to increase. And so, if we — if we, six months from now, are still here talking about 240,000 new jobs, that won't be good.

    Part of the reason we are encouraged is that we had more job growth last month than the month before, and more the month before than the month before that. And we really need to keep going with this pace of improvement in order to start putting back to work many of these people who were left unemployed by the great recession and who very much want to be working again.


    And I noticed you posted today on your website, on your — the place where you write online, you showed a graph what unemployment — employment has looked like over the last couple of years.

    And you really do see, when you look at that, that, yes, it was really, really bad, but it's getting better. The trend line is better.


    Yes. My colleague Catherine Rampell does that chart. And she has been doing it every month. It is an amazing chart. You see just how much deeper this downturn was than other downturns.

    And you also see that things started to get better early last year, and then they sort of went in a jagged line, where they didn't bet better. And so part of the fear about now is that we could be — we are at least at risk of repeating that, because recoveries from financial crises tend to be slow and uneven.

    And so the reason I left today's numbers encouraged is that it looks like things are still getting better.


    David Leonhardt, New York Times, thank you again for being with us.


    Thank you, Judy.