May 3, 2019

Springtime Surge in Jobs Growth

February Snow Showers Bring April Flowers?

Overview 

The average monthly job growth in the first four months of 2019 (205,000 per month) has been equivalent to the average monthly increase since employment growth restarted in earnest after the Great Recession (204,400 per month since January 2011, when steady and strong job growth began), suggesting that there’s little worry that the economy is slowing down after the financial market correction last fall. Meanwhile, the headline unemployment rate hit a nearly 50-year low at 3.6 percent—the number of unemployed active job-seekers fell by 387,000 (a 6.2 percent decline).

After an unexpectedly sharp dip in jobs growth in February (attributed in part to the federal government shutdown and winter storms), the labor market sprung back in March and April. The Bureau of Labor Statistics (BLS) reported that businesses added 263,000 jobs in April, while the estimates for February (56,000) and March (189,000) were revised for a net increase of 16,000 jobs.

The Deep Dive

The drop in the unemployment rate is all the more impressive because the labor force participation rate (LFPR) also declined by 0.2 percentage points last month (490,000 fewer workers in the labor market—likely attributable to baby boomers retiring). The drop in LFPR would have caused a rising unemployment rate if the number of unemployed active job-seekers had not also substantially declined. In addition, the number of inactive/not-currently-available job-wanters also declined by 106,000, so it’s clear that those leaving the labor force weren’t doing so out of frustration at a lack of employment opportunities.

Those leaving the labor force weren’t doing so out of frustration at a lack of employment opportunities.

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Some experts may attribute April’s surge in hiring to the US Census Bureau preparing for the 2020 Census with an initial round of hiring, but federal government (non-USPS) payrolls only added 12,500 new workers last month. It seems that now the scare in financial markets has fully abated, employers are hiring workers left and right to meet increased demand for services (202,000 jobs were added in service-providing industries).

It will be interesting to see how the labor market handles the surge in Census hiring--it’s anticipated that 500,000 new Census workers will be needed (with most new hiring occurring in 2020). Annual average hourly earnings grew at a rate 3.2 percent last month and it seems likely that if current economic conditions continue (or even improve, should President Trump’s trade war with the rest of the world be resolved) that Census hiring will push wage growth, especially for lower-skilled jobs, even higher.

Quick Statistics from the April 2019 BLS Jobs Report

Headline Employment Statistics

  • Total nonfarm payroll employment increased by 263,000 jobs.
  • The labor force participation rate decreased by 0.2 percentage points to 62.8 percent.
  • The headline unemployment rate (U-3) decreased by 0.2 percentage points to 3.6 percent.

Unemployment Statistics

  • The mid- to long-term unemployment rate (15 weeks or longer; U-1) dropped slightly to 1.3 percent.
  • The discouraged worker unemployment rate (U-4) fell by 0.2 percentage points to 3.9 percent.
  • The comprehensive jobless rate (U-5b) fell by 0.3 percentage points to 6.5 percent.

Deeper Unemployment Statistics

  • Long-term unemployed workers (27 weeks or longer) decreased by 75,000 to 1,230,000; the proportion of long-term unemployed workers remained constant at 21.1 percent of those who are unemployed.
  • The number of people who wanted to work full time, but who could only find part-time work for economic reasons increased by 155,000 to 4.65 million, which was 17.9 percent of all part-time workers.

Wages

  • Average hourly earnings rose by 3.2 percent over the previous 12 months.
  • Average weekly earnings rose by 2.9 percent over the previous 12 months.

Photo credit: Justin Sullivan/Getty Images

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