Economist says job report points to dangerous path for economy
Ball State economist Michael Hicks says that the U.S. economy generated fewer jobs than expected in April, setting the stage for a potentially disastrous summer.
The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 115,000 last month, much lower than the consensus estimate of about 165,000. The jobless rate fell to 8.1 percent from 8.2 percent, as more people left the work force.
“Three months of declining job numbers, a shrinking labor force, several weeks of rising unemployment claims and reports of increasing layoffs materializing this summer point to a dangerous path for this economy,” Hicks says. “Today’s job numbers are unambiguously bad news. This is less than half the rate of job growth the country needs to avoid dipping into negative real economic growth.”
He says the combination of high gas prices, European insolvency, looming state debt problems and political uncertainty weigh heavily on job creation.