An Improving Job Market - Is It Enough?

by: Dr. Scott Brown

Excerpt from Raymond James Economist Dr. Scott Brown's latest economic commentary:

The April Employment Report was surprisingly strong. Private-sector payrolls rose much more than anticipated and gains were broad-based across industries. The unemployment rate rose unexpectedly, but that was due to a surge in labor force participation. Still, this is just a start. We’d like to see much stronger job growth from here, but that doesn’t seem likely given the number of headwinds.


The unemployment rate rose to 9.9% in April (9.863% before rounding), up from 9.7% in March. That increase does not signal weakness. Rather, labor force participation rose to 65.2% (vs. 64.9% in March). Many discouraged workers (who have given up looking for a job and aren’t officially counted as unemployed) begin to look for jobs again as the labor market starts to recover. The number of unemployed who were reentrants to the labor force rose to 3.7 million in April.


So where does this leave us? There are continued headwinds in the near term (tight credit, strains on state and local government budgets), but there appears to be enough positive momentum to carry us forward. Yet, while the economy is getting better, the road to a full recovery will be lengthy.