updated: 5/7/2012 7:46:04 AM
A Ball State University economist says the worse-than-expected national unemployment report could be a sign of bad things ahead for the economy. Michael Hicks calls the 8.1 percent jobless rate "unambiguously bad news," and says a number of factors including gas prices and European insolvency could continue to hold down job creation.
May 4, 2012
MUNCIE, Ind. - 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 today 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.
Source: Ball State University