April 2010 Employment Report: Ghosts, Temps and Census Workers – Oh My!

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Although the Bureau of Labor Statistics (BLS) estimates non-farm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent because of the number of people returning to the labor force. Job gains occurred in manufacturing, professional and business services, health care, and leisure and hospitality. Federal government employment also rose, reflecting continued hiring of temporary workers for Census 2010.

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Total non-farm employment stood at 130.2 million in April, down 7.8 million (5.6 percent) from the December peak of 138.0 million.

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The estimate of 290,000 added jobs is just that – an estimate. It is important to note that 188,000 (65 percent) of those 290,000 jobs were the result of Current Employment Statistics (CES) models the BLS uses to account for business closings and openings that occurred recently enough that they were not captured in the employment survey. Because these jobs are derived from statistical models, some analysts refer to them as “ghost” jobs. Those models do no always perform well, so their results should be taken with a grain of salt.

Another aspect of the report that many in the mainstream media often overlook is the number of temporary jobs. As mentioned above, the Census Bureau hired 66,000 temporary workers to help with the 2010 census. What is less widely reported, however, is that another 26,000 workers were hired by temporary help services. I.e., 92,000 (almost a third) of the 290,000 jobs were temporary in nature.

Subtracting the 188,000 “ghost” jobs, the 66,000 Census workers, and the 26,000 temporary private-sector hires from the 290,000 leaves us able to assert with some confidence that at least 10,000 permanent, full time positions were created in April.

Some other findings from the employment report include:

• 15.3 million remained unemployed in April; also the unemployment rate edged up to 9.9 percent after remaining stable at 9.7 percent during the previous three months. The unemployment rate edged up because more people returned to the workforce.
  
• The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up over the month, reaching 6.7 million. In April, 45.9 percent of unemployed persons had been jobless for 27 weeks or more.
  
• The number of persons employed part time for economic reasons (either because their hours had been cut back or because they were unable to find a full-time job) was about unchanged at 9.2 million.
  
• About 2.4 million persons were marginally attached to the labor force in April (compared with 2.1 million a year earlier). These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey. Among the marginally attached, there were 1.2 million discouraged workers (up by 457,000 from a year earlier). Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force had not searched for work in the four weeks preceding the survey for reasons such as school attendance or family responsibilities.
  
• An alternative measure of labor underutilization (called the “U-6”) – which tallies the “officially” unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force – rose to 17.1 percent in April (from 16.9 percent in March). The U-6 measure used to be the official unemployment rate until during the Clinton administration.
  
• The average workweek for all employees on private non-farm payrolls increased by 0.1 hour to 34.1 hours. Also, average hourly earnings of those employees increased by one cent to $22.47 in April.
  

In summary, although it is impossible to know how many people actually succeeded in finding permanent employment in April, we can be at least reasonably confident that the employment situation has not worsened materially since January. Nonetheless, there remains considerable slack in labor demand.