NEW YORK (TheStreet) -- The economy added 115,000 jobs in April -- much less than expected and not enough to keep up with natural population growth. The unemployment rate fell to 8.1% because another 522,000 adults quit looking for work and are no longer counted.
In the weakest recovery since the Great Depression more than four-fifths of the reduction in unemployment has been accomplished by a dropping adult labor force participation rate -- essentially, persuading adults they don't need a job, or the job they could find is not worth having.
In the first quarter, growth slowed to 2.2% and was largely sustained by consumers taking on more debt, and additions to business inventory. The housing market is improving and that should lift residential construction a bit, but overall the economy and jobs growth should slow further in the second quarter. The April jobs report bares evidence to a slowing pace of economic expansion and is a precursor of more consumer caution.Manufacturing added 15,000 jobs, down from 28,000 in March. That sector's strong recovery should be generating more gains. Elsewhere jobs gains were weak and generally down from February. 10 Worst-Off State Pension Funds >> Construction shed 2,000 jobs and transportation and warehousing lost 17,000 employees, as logistic companies brace for a further slowdown. The government lost 15,000 jobs, and the private sector added 130,000. Other sectors of the economy posted generally modest gains. Gains in manufacturing production have not instigated stronger improvements in employment largely because so much of the growth is focused in high-value activity. Assembly work, outside the auto patch, remains handicapped by the exchange rate situation with the Chinese yuan. And concerns about the durability of the recovery and health care costs when Obama Care is fully implemented make employers very cautious about adding to headcount. Overall, the situation with the yuan is the single largest impediment to more robust growth in manufacturing and its broader multiplier effects for the rest of the economy; the Obama Administration indicated it has no intention of challenging China on this issue, but presumptive GOP standard bearer Mitt Romney promises a harder line.