The April jobs report released today handily beat expectations (+288K vs. 218K), but it doesn't alter the big picture: private sector jobs have been growing by about 2% per year for the past several years. That's enough to give us 2-3% overall growth, but not much more.
The private sector has been creating about 200K jobs per month during non-recessionary periods for quite a long time.
This works out to a growth rate of about 2% these days, which we have seen on average since early 2011.
The great disappointment is the ongoing decline in the labor force participation rate, which hasn't been this low since 1978. This needs to turn up if we are to enjoy robust growth conditions. That probably awaits better policies out of Washington. Businesses are not very eager to create new jobs, and those who are unemployed are not very eager to seek out job opportunities. We need to revive the economy's "animal spirits" by increasing the incentives to work and invest. That could be done by simply reducing marginal tax rates, which in turn could be paid for by reducing the massive amount of deductions, subsidies, and loopholes in our seriously-bloated tax code. Once again, the solution to slow growth is to get the government out of the way of those who want to make money.
The good news is that the private sector of the economy has created some 9.2 million jobs since the post-recession low of early 2010. The bad news is that there should be many millions more jobs now that we are in the fifth year of job expansion. It's a bit disappointing that the economy is no longer shedding public sector jobs, which have been relatively flat for the past year. As I argued in an earlier post, the huge expansion of government intervention in the economy has been one of the main causes of the sluggish recovery. We'd do better to keep shrinking the public sector, but again, that requires a change in the way Washington thinks about the world. The government can't create productive jobs nearly as well as the private sector can.
Part-time employment has been relatively flat for the past 5-6 years, and has been declining relative to total employment. This is nothing unusual.
The unemployment rate fell mainly because of a large reduction (806K) in the labor force. This is not real progress.