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JCN: Unemployment rate masking a recovery on the rocks

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JCN: Unemployment rate masking a recovery on the rocks

Modest growth in April jobs isn't enough of a silver lining to hide a bad GDP report and historically low labor force participation rate.

The chief executives of Job Creators Network today said the April jobs report released this morning is not a cause for celebration. Rather, they point to the bigger picture problems of continuing sluggish GDP growth and a labor force participation rate stuck at a 37 year low.

"Last week, we learned the economy has barely grown at all so far this year, and that's on top of a very disappointing 2.4% growth for all of 2014," said Alfredo Ortiz, President and CEO of the Job Creators Network. "Four percent growth is the recovery we need but don't have; three percent is breaking even; and less than that is a recovery on the rocks."

"Four percent growth is the recovery we need but don't have; three percent is breaking even; and less than that is a recovery on the rocks."

The US Commerce Department reported last week that first quarter 2015 GDP growth was a nearly non-existent 0.2%. This morning's jobs report showed 223,000 new jobs created and an unemployment rate of 5.4%.

"One reason we're not growing like we should is that Americans are no longer looking for work like they used to," noted Ortiz. "The labor force participation rate has been less than 63 percent for a full year, for the first time since March of 1978."

Last month's jobs report showed the labor force participation rate, a measure of the percentage of working age adults in the labor force, remained stuck at less than 63% for a full year. This important measure remained at 66% or above for most of two decades prior to the 2008-2009 recession. The chronically lower participation rate means more than 7 million additional Americans are not working, yet not counted as unemployed by the official measure.

"We will not row our way to a robust recovery if so many Americans are no longer looking for an oar to pull," concluded Ortiz. "Whether the issue is regulation, healthcare, minimum wage hikes, or our convoluted corporate tax system, Washington politicians need to get government out of the way so the cost of hiring can come down."

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