April Jobs Report Borderline Disaster
President Barack Obama is taking a victory tour, telling the world how he saved the U.S. economy. Meanwhile, the fallout from the president’s bad economic decisions continues to pile up. For proof, take a look at the April jobs report.
Here are the five things you need to know.
1. The Economy Added Only 160,000 Jobs
Non-farm payrolls increased by 160,000 jobs last month, falling far short of economists’ already low expectations. That was the smallest gain since September and below the first-quarter average job growth of 200,000. (Source: “Employment Situation Summary,” Bureau of Labor Statistics, May 6, 2016.)
Worse still, we also learned that job additions in previous months were far lower than originally reported. In February, the change in total non-farm payroll employment was revised from +245,000 to +233,000. In March, job gains were revised from +215,000 to +208,000. In total, employment gains in February and March were 19,000 less than previously reported.
2. The New Jobs Are Terrible
Most of the new jobs are terrible. According to the household survey, the number of full-time workers declined by 253,000.
Much of the job growth has been concentrated in service sectors, which added a whopping 65,000 positions. In other words, 82% of jobs “created” in April were for minimum-wage waiters, baristas, bartenders, and cashiers.
3. Resources Are Getting Crushed
No surprise here. Low energy prices have hammered oil centers like Houston and Dallas. Weak commodity prices have made mining in the United States pretty much uneconomical in recent months.
That trend showed up again in the job numbers. Mining employment dropped by 7,000 jobs in April. Since September 2014, employment in mining has decreased by 191,000.
4. Americans Are Dropping Out of the Labor Market
There was some good news in this report. According to the Bureau of Labor Statistics, the average workweek edged higher to 34.5 hours. The unemployment rate also held steady at five percent, down from 5.4% during the same time last year.
Most of that drop in unemployment, however, has come from Americans giving up on looking for work. In April, the number of people not in the labor force soared by a whopping 562,000. This pushed the total of Americans not in the labor force back over 94.0 million—nearly approaching an all-time high.
5. Wall Street Is Worried
Stock futures briefly fell after the report. The odds of the Federal Reserve raising rates in June plunged to four percent—the lowest on record. Even looking out as far ahead as February 2017, traders see less than a 50-50 chance of a rate hike.
Gold has been the biggest winner this morning. Prices rose $19.10 per ounce or 1.50% to $1,291. With a Fed rate hike off the table (even the possibility of negative interest rates in the near future), stashing wealth in hard assets seems smarter than ever.