The Job Market Crashes to Earth

If you happened to hear a loud, sustained moan of pain around 8:30 this morning, chances are it was the collective sound of the financial world reading the this month's jobs report. Employers added an anemic 69,000 positions to their payrolls in April, less than half of the 150,000 economists were predicting as of yesterday. Worse yet, the labor department revised down its estimate for March's jobs growth, from 115,000 all the way to 77,000. The unemployment rate ticked up slightly to 8.2 percent, as a few more Americans started hunting for work again (having apparently waited for the wrong time).

It was ugly. Like, Freddy Krueger ugly.

Earlier in the year, it seemed as if the U.S. labor market might be capable of defying the gravity of the world's economic problems. The country gained an average of 226,000 jobs a month from January though March, expanding as Europe spiraled into crisis and China showed signs of slowing down. But it might have been false hope. We know some of that economic activity was the result of an unusually warm winter, which moved up construction work earlier into the year. This month, building jobs shrank by 28,000 when seasonal adjustments are taken into account.

In short, there now two months of data showing that we too are being dragged down into the globe's mess, which is only becoming more severe. Europe has proven itself chronically incapable of getting its act together. China's woes are accelerating as its factory production slides. These are our export markets, and as they contract, our factories, which have been the backbone of this recovery, are going to be in trouble. Already, May manufacturing output grew at the slowest rate in three months. And with Congress effectively on hiatus until the election, there isn't much sign that any help will come from our elected officials. The job market's only lifeline may be the Federal Reserve, which could try to inject some life into the economy by printing more money if hiring continues to disappoint. But there are no guarantees.

To put today's results in a long term perspective, I headed over to the Hamilton Project's recovery calculator, which lets you forecast how long it will take the country to return to pre-recession employment levels. If we added 208,000 jobs a month, which was the average during the best year of the oughts, we'd make it by around 2020. For some macabre fun, I plugged in 69,000. It couldn't give me an answer.

Our jobs growth is lower than anybody contemplated it might be a few months ago. And without some help, there's no sign things are going to improve.