US job gains attributed to an 806,000 drop in number of job seekers
03 May 2014
The number of people looking for jobs in the US shrank by 806,000 to a 35-year low in April, which in turn helped the labour department report a big decline in jobless rate, CNBC reports.
The US labour department on Friday reported a 4 basis point decline in unemployment rate to 6.3 per cent in April from 6.7 per cent in March, touting it as the biggest gains in job creation in more than two years.
The unemployment rate for April 2014 was also the lowest in the US since the height of the recession, in October 2008.
But, according to the CNBC report, the figures disguise less promising news that hundreds of thousands of people altogether stopped looking for a job.
As per the April jobs report, US unemployment rate dropped from 6.7 per cent to 6.3 per cent, showing a larger than expected gain of 288,000 jobs.
"I consider 288,000 jobs created to be significant progress," CNBC quoted secretary Thomas Perez as saying.
"We are moving in the right direction. You look across the broad range in growth of last month, you look at construction jobs, education and health, professional and business services, these are all middle class and upper middle class jobs."
While government officials and some economists see this as a sign of strengthening of the economy, analysts say the picture is not as rosy as it may appear.
Republicans say this is due to the ruling Democrats' refusal to take up the necessary measures to stimulate real job growth.
They say there are so many low-paying jobs floating around and that the employment report, which looks quite strong on its face, has some discouraging data beneath.
"President Barack Obama ought to call on his Democratic-led Senate to take up the stacks of House-passed jobs measures so we can get this economy moving again," House Speaker John Boehner said in a statement.
Meanwhile, a Bloomberg report said the average hourly earnings in April rose by a slower 1.9 per cent to $24.31, the smallest gain in the past 12 months.
The number of American companies planning job cuts also jumped 17 per cent to 40,298 in April compared to the previous month.
The biggest job losses were in the retail and financial services sectors, as employers faced a challenging business environment.
However, at 161,639 planned cuts so far, the pace of layoffs in 2014 is the lowest since 1997, according to analysts.
