Good News, Latest Jobs Report Is Slightly Worse
SCOTT SIMON, host:
The news from Wall Street this week would have been perhaps even uglier yesterday if it weren't for some good economic news from the U.S. Labor Department. The U.S. economy in April gained 290,000 jobs. That's the biggest increase in four years, and it suggests the economic recovery is gaining some momentum.
NPR's Chris Arnold reports.
CHRIS ARNOLD: We've heard a lot about the decline of manufacturing in the U.S., but the economy has actually been adding tens of thousands of manufacturing jobs over the past few months.
Mr. FRED PIERCE (President, Metal Works): We have hired back about 20 people in the last six months. That's about 20 percent of our workforce.
ARNOLD: Fred Pierce is the president of Metal Works in London Dairy, New Hampshire. The company builds metal boxes for medical equipment and other electronics gear. Pierce is standing in front of a big, red machine that's robotically lifting back and forth big pieces of sheet metal. It looks sort of like a giant, 10-foot-tall, red stapler.
Mr. PIERCE: This is what's known as a turret punch press.
ARNOLD: So each one of those bangs is a hole being punched through a sheet of metal?
Mr. PIERCE: That's exactly right, yeah.
(Soundbite of banging)
ARNOLD: Last year, a lot of this expensive equipment here was just sitting idle, and there was no business coming in. Pierce had to lay off almost half of his workforce.
Mr. PIERCE: There were moments where we were just saying, what are we going to do, how are we going to keep this place going? We didn't want to lay any more people off. It's such a hard thing to do, and it's so great to be able to bring people back.
ARNOLD: This latest jobs report from the Labor Department shows that in lots of other industries, too, companies that had been laying people off are starting to hire again.
Mr. NARIMAN BEHRAVESH (IHS Global Insight): This is basically very, very good news.
ARNOLD: Nariman Behravesh is chief economist at the forecasting firm IHS Global Insight.
Mr. BEHRAVESH: This is a much bigger number than most analysts were thinking, and it's broad-based. Not only the service sectors, which we knew would do fairly well, but manufacturing and construction, interestingly enough, all generated new jobs. And even better is that the prior two months were revised up.
ARNOLD: Behravesh says the report is further evidence that the economic recovery has legs. Still, those legs have a long journey ahead of them, and they've only taken just the first few steps.
Mr. BEHRAVESH: One way to look at this past recession is that in terms of jobs loss, about 8 million, it's actually worse than the last four recessions put together. So this is a very deep hole we're in, in terms of employment. It's going to take us quite a while to climb out of it.
ARNOLD: Behravesh thinks it will take about five years for unemployment to get back down to around 6 percent.
In fact, while the economy gained jobs in April, the unemployment rate actually went up a bit, to 9.9 percent. That's because people who had given up hope of finding a job actually started looking again. That pushes the unemployment rate higher when those people try to re-enter the workforce. And there are still millions more people like that who haven't yet been factored into the unemployment rate.
Mr. PIERCE: So this is a C and C laser cutting machine, and it actually uses a laser, light beam to cut through steel.
ARNOLD: Back at the Metal Works factory, you can get a sense of the long and tenuous road ahead from Fred Pierce.
Mr. PIERCE: I can't even say I'm optimistic. I'm just cautious. I'm looking forward to being cautiously optimistic.
ARNOLD: So you're not even cautiously optimistic?
Mr. PIERCE: That is correct.
ARNOLD: Part of Pierce's worry is that while business has picked up a bit, he says he still senses a lot of uncertainty out there in the economy. And he just doesn't know whether he can count on that business being there a month or two from now.
Mr. PIERCE: I have no idea. I mean, we're on pins and needles here every day, trying to figure out how we're going to manage this business.
ARNOLD: Economists, too, say the world is still recovering from a crisis in the banking system and a big recession at the same time, and that just makes it hard to predict what's coming next. But they say a good jobs report is definitely a step in the right direction.
Chris Arnold, NPR News, Boston.
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