On Friday, May 8, 2015, the Bureau of Labor Statistics (BLS) released its employment report for April of this year. Total nonfarm employment saw a 223,000 increase, while the unemployment rate showed little change at 5.4%. (Source: Bureau of Labor Statistics, May 8, 2015.)
April Employment Report: Rosy Revelations
After the disappointing growth last month, April’s nonfarm payroll employment rose by 223,000. The main sectors that contributed to this increase were professional and business services, healthcare, and construction. Professional business services gained 62,000 jobs; the healthcare industry gained 45,000 jobs; and construction gained 45,000 jobs.
The mining industry continues to struggle, having lost 15,000 jobs in April. The sector has lost a total of 49,000 jobs since the beginning of this year.
My Take: Troubling Statistics
Despite the solid employment gains, there are a few things that worry me in the job report. It is very critical to look at the details.
The labor force participation rate is at 62.8%—which shows little change. This number has been hovering between 62.7% and 62.9% for 12 months. Looking at historical data, the last time the labor force participation rate was this low was in the 1970s. (Source: Federal Reserve Bank of St. Louis, last accessed May 8, 2015.)
Similar to March’s situation, April’s report shows 6.6 million people who wanted to work full time but were only able to work part time due to the lack of available jobs. There are 2.1 million people who were not in the labor force, but who had looked for jobs within the previous 12 months. They are considered to be marginally attached to the labor force. Among them, there were 756,000 discouraged workers who stopped looking for jobs completely.
In the report, the BLS also revised the numbers for February and March. Job gains in February were revised from +264,000 to +266,000. March’s number was revised downfrom an already dismal +126,000 to +85,000. In total, the revision shows we should have 39,000 fewer jobs gained than previously reported.
After revisions, the average number of jobs gained over the past three months was 191,000 per month. The monthly average of jobs gained was 260,000 for 2014. This means employment gains for the past three months were 26.5% lower than last year’s average.
Taking all of this into account, it is clear that the U.S. labor market remains fragile and fundamentally tormented.