If There Was a Surge of New Jobs in April, Why Are More People Unemployed?

By Kyle Stock and Jeremy Greenfield

April showers brought jobs as private sector employment surged last month. The winners were those workers willing to take on multiple roles as employers selectively started to hire again, said labor economists and workforce experts.

The private-sector added 268,000 jobs last month but the unemployment rate rose slightly to 9%, according to today's report from the Bureau of Labor Statistics. The job growth bested the expectations of economists who had called for a gain of about 185,000.

"Pretty strong numbers," said Mike Ryan,senior vice president at Madison Performance Group,an HR consultancy. "It's really a reflection of the battle for talent already being underway."

While the economy added many more jobs than expected, the increased unemployment rate indicated that more people are looking for work -- recent graduates, retirees returning to the workforce and those who had been discouraged but see the improving economy as a reason to start looking again. The recovery could continue while unemployment stagnates at a fairly high level.

"We're not having the same kind of recovery," said Ron Laschever, a labor economist at the University of Illinois at Urbana Champaign, referring to the days of 5% unemployment. Laschever thinks unemployment will hover around 9% for the rest of the calendar year.

The jobless rate would be lower if companies had been less picky. In February, there were 3.1 million job openings in the U.S., 25% more than there were a year earlier, according to data from the Federal Bureau of Labor Statistics. Some 500,000 of those positions were in health care, while 203,000 were in manufacturing.

Catherine Farley, a managing director at Accenture who specializes in talent and workforce management issues, said many of those jobs require candidates that are used to working in several capacities or across several geographic regions.

"We're seeing a lot more complex jobs and it's harder to find the talent for those positions, so it's taking longer to fill those jobs," she said.

Farley added that employers have shown a tendency to hire workers from competitors or transfer an employee from another role.

"This may sound trite, but candidates should really try to just get back in the workforce," she said. "They need to be willing to take a job that's less than perfect."

Power Shift

At the same time, employers are asking their current staff to do more. Since September 2008, productivity has increased in every quarter but one, according to data released by the BLS yesterday.

"Companies today are growing on the backs of their best employees," Ryan said. However, the job growth of recent months has emboldened workers to look elsewhere. "The power is shifting from employers to employees," he said.

Laschever questioned whether recent productivity gains are sustainable.

"People might be willing to take on extra duties without being compensated, especially in labor market conditions that are not that favorable," he said, but as the economy adds job, workers will demand more pay.

Areas of Promise

There was also some uplifting news today for those who have been jobless for awhile. The number of unemployed who have been out of work for 27 weeks or more dropped by 4.6% to 5.8 million.

Job seekers should note that while some cities and states continue to suffer, certain areas of the country are approaching what economists call "full employment." The unemployment rate in California, for example, is roughly three times as high as the jobless level in North Dakota.

Laschever said frustrated job seekers should consider those promising pockets of the country.

The unemployment rate is also relatively low for workers with a college degree, 4.5% -- an incentive to finish school if there ever was one.

"When it's harder to find a job, it's a better time to go back to school," Laschever said.

Like geography and different educational levels, industry is another track where job seekers can look for opportunities. Some sectors, like health care and education, have been particularly durable during the recession.

In April, retailers were particularly bullish, adding 57,000 employees, while health care employers hired 37,000 workers and manufacturing firms tacked on 29,000 employees.

Job seekers should consider whether the skills they have are transferable to one of these industries, according to Laschever.

Next:Job Gains Largest in 11 Months, But Jobless Rate Up

Related Stories From FINS.com

Read Full Story