April jobs report: What it means for you
The unemployment rate for Latinos is stuck above 10 percent.
Has the economic recovery hit a pothole?
For the second month in a row, job growth in the United States sputtered, raising questions about the health of the economy and the impact on the presidential race.
The economy added 115,000 jobs and the unemployment rate ticked down slightly to 8.1 percent. In addition, the unemployment rate for Latinos remained sky-high at 10.3 percent.
The economics and politics of today’s report
On the surface, Friday’s weak jobs report helps underscore Mitt Romney’s argument that Latinos are suffering economically under President Obama, it will still be a tough sell for Romney to convince enough Latinos to support him on that basis alone.
Sitting above 10 percent, the Latino unemployment rate remains high. 2.5 million Latinos were out of work in April and in a sign of discouragement, 843,000 have dropped out of the labor force over the past year.
Those numbers have the potential to help Romney make an effective argument that Latino voters should show Obama the door. Latino voters rank the economy and jobs as their top concern, according multiple polls.
“It reiterates the central question of the campaign, which is ‘are you better off than you were four years ago?’,” Romney adviser Albert Martinez told Univision News. “I don’t think anyone can say that’s true, and that’s especially true within the Latino community.”
In addition to the national numbers, Martinez pointed to the fact that the unemployment rate for Latinos is far above the state averages in battleground states such as Florida and Colorado.
The former Massachusetts governor appeared confident Friday, setting goals of 500,000 jobs created per month and unemployment of 4 percent nationally under his administration.
But Romney has a lot of work to do to convince enough Latinos that Obama is the one to blame for the weak economy and that he would do a better job.
Sixty-six percent of Latino registered voters nationwide believe former President George W. Bush is to blame for the nation’s economic troubles, with only 18 percent saying it’s Obama’s fault, according to a January poll conducted by Latino Decisions for Univision and ABC News.
Underscoring that point, a Romney campaign infographic meant to illustrate Obama’s deleterious effect on Latinos’ economic well-being used base line data from 2008, when Bush was still in office.
In addition, 61 percent trust Obama and Democrats to fix the economy, with only 24 percent listing Republicans.
“How is this a big opening for Romney? It’s bad news for Obama, but I see no upside here for Romney,” said Gary Segura, a principal for Latino Decisions. “I think it’s going to be difficult for Romney to break through given his difficulties with the Latino community. It could drive down enthusiasm for [Obama], but I doubt it.”
But Martinez, who hails from Florida, countered that it’s still too early to discount the possibility of Romney selling Latinos on his economic plan.
“It’s like predicting the outcome of a Miami Heat game based on the first possession of the game. It’s early. The general election is just starting, and President Obama has a terrible record to try to defend,” he said.
In Florida — a state where, because of the demographic makeup, Romney has the best chance of winning a large chunk of Latino voters — only 25 percent blame Obama for the state of the economy. But the numbers indicate Romney has an opening. Less than half believe Obama and Democrats have the right solutions for the economy.
While progress has been slow, Latinos are actually better off economically than they were during the end of the Bush years when the recession was in full swing.
For example, the Latino unemployment rate is down 2.1 percentage points from Feb. 2010, when it was at 12.4 percent. By contrast, Latino unemployment surged 3.5 percent in 2008, the last year Bush was in office.
A Pew Research study actually found that Latino and Asian workers were recovering from the recession at a much faster pace than other workers. Since April 2011 1.6 million more Latinos have become employed.
“The idea that people would go vote Republican because the unemployment rate has been stable and falling doesn’t seem plausible to me,” said Segura.
But Republicans say that shouldn’t be enough to convince Latinos to give Obama another four years in office.
“You’re trying to convince people that [10.3 percent] is the new normal good. That’s not acceptable,” said Jennifer Sevilla Korn, executive director of the conservative Hispanic Leadership Network.
The bottom line
No matter the political spin, April’s jobs numbers were poor but the economic recovery continues.
The number of jobs created has fluctuated month by month, but there has been a downward trend since February. The varying numbers are actually due in part to an unusual factor: weather conditions.
Businesses hire more people in warmer weather and the warm winter may have dragged forward hiring decisions that would have been made in March and April. If we look at the four month average the U.S. economy has added 201,000 jobs per month—a relatively solid number. This is consistent with a gradual, though not rapid, economic recovery. At this rate it will still take around 8 years to reach full employment (considered between 4-6 percent unemployment rate).
One thing to watch for in the coming months is the size of the revisions to monthly jobs numbers. Each jobs report from January to March has later been revised upwards. For example, the number of jobs created in January was revised from 243,000 to 275,000, in February this was revised from 240,000 to 259,000 and in March from 120,000 to 154,000. Expect to see April’s 115,000 revised slightly upwards as well.
April’s report confirms that fewer people are looking for work. This is the main reason that the unemployment rate actually dropped from 8.2 percent to 8.1 percent, not robust job growth. According to the Federal Reserve of Chicago, this is happening for two reasons: some workers are getting discouraged and no longer looking for jobs and others are getting older and retiring.
It’s not time to push the panic button with regards to the economy, but in a rough and tumble political climate in an election year, the monthly jobs reports will continue shape the perception of how the economy is performing.
(Photo: Flickr, kandyjaxx)