Disappointing April Jobs Report: Public Sector Layoffs and Shrinking Labor Force
In a new report certain to generate consternation in the stock market and the White House but private glee in the Republican Party, the Bureau of Labor Statistics announced Friday that the private sector generated a seasonally adjusted 130,000 jobs in April. Public sector layoffs brought the total down to 115,000.
It was the second month in a row that the economy created a disappointingly low number of jobs. This indicates that the upward trend in job creation of earlier this year has gone the way it did in 2011. Only this time, there is no Japanese tsunami or Arab revolutions interfering with commerce and putting uncertainty into the mix of perceptions about where the economy might be headed.
The figure was well below what a consensus of experts had forecast, the weakest April showing in three years and the slowest job growth since October. The official unemployment rate fell to 8.1 percent. But that was entirely due to a drop in the size of the labor force.
One small positive: Revisions changed growth in payroll employment in February from 240,000 to 259,000 and in March from 120,000 to 154,000.
The civilian labor force participation rate fell to 63.6 percent and the employment-population ratio fell to 58.4 percent.
"This remains a weak economy, and the job counts in March and April—which have come in at considerably below 200,000 per month—may perhaps continue right through the summer," said Kathy Bostjancic, director of macroeconomic analysis at The Conference Board.
Nearly three years after the official end of the Great Recession, 12.5 million Americans are officially out of work, 5.1 million of them for longer than at any time since the depths of Great Depression 80 years ago.
An alternative measure of unemployment called U6 includes part-time workers who want full-time work and some but not all of the millions of people who have become too discouraged to look for work. That number was unchanged at 14.5 percent. Overall some 25 million Americans are jobless or underemployed. If large numbers were not leaving the workforce, the situation statistics would look worse than they do. How many of those are leaving forvoluntary retirements is a matter of contention.
Here's what the new job numbers have looked like for April in the most recent six years:
April 2007: +72,000
April 2008: -208,000
April 2009: -692,000
April 2010: +239,000
April 2011: +251,000
April 2012: +115,000
While the survey of business establishments showed the 115,000 increase, the BLS's monthly household survey (Current Population Survey) showed the number of jobs fell by 169,000. The CPS number is more volatile, which means it rarely makes the headlines.
The BLS jobs report is the product of a pair of surveys, one of business establishments and the Current Population Survey of households. The establishment survey determines how many new jobs were added. The CPS provides data that determine the official "headline" unemployment rate, also known as U3. That's the number that is now at 8.1 percent.
Among other changes detailed in today's job report:
• Retail: +29,000
• Financial: +1,000
• Constructon: -2,000
• Transportation & warehousing: -17,000
• Leisure and hospitality: +20,000
• Professional & business services: +62,000
• Health care: +19,000
• Manufacturing: +16,000
• The average workweek (for production and non-supervisory workers was unchanged at 34.5 hours.
• Average manufacturing hours rose to 40.8
• The average hourly earnings for all employees on private nonfarm payrolls rose by 1 cent to $23.38. Over the past year such earnings have risen 1.8 percent, compared with an inflation rate now running at 2.7 percent.