The
Bureau of Labor Statistics’ (
Meanwhile, the unemployment rate (based upon the BLS’s household survey) ticked up 0.1 percentage point, to 3.9%, as the unemployed (+63,000) comprised over 72% of growth in the labor force (+87,000).
Observations from the employment reports include:
* The two surveys were once again in relative
agreement, which supports their credibility. That said, seven jobs were allegedly
created for each additional person employed, which seems implausible.
*
Goods-producing industries gained 14,000 jobs; service providers: +161,000. Job
gains occurred in health care (56,000), social assistance (31,000), and transportation and warehousing (22,000). Job losses occurred in temporary help
services (-16,400) and information (-8,000). Total nonfarm employment (158.3
million) is now 6.0 million jobs above its pre-pandemic level in February 2020 (private
sector: +5.57 million; public sector: +404,000). Nonetheless, employment is perhaps
4.5 million below its potential if accounting for growth in the working-age
population since January 2006.
Manufacturing jobs grew (+8,000) as a gain in durable goods (+1,000) rounded out the change in nondurables (+7,000). That result seems to conflict with the change in the Institute for Supply Management (ISM) manufacturing employment subindex, which rose closer to breakeven in April. Wood products manufacturing added 1,400 jobs (ISM unchanged); paper manufacturing: +700 (ISM decreased); construction: +9,000 (ISM increased).
* The number of employment-age persons not in the labor force rose (+94,000) to 100.1 million (nearly 4.9 million above the February 2020 mark). Because the working-age civilian population expanded (+87,000) more quickly than the number of employed (+25,000), the employment-population ratio (EPR) ticked down fractionally to 60.2%, which is 0.9PP below its February 2020 level.
* Also, although the working-age civilian population rose by 182,000 while the labor force expanded by just 87,000, the labor force participation rate was unchanged at 62.7%. Average hourly earnings of all private employees advanced by $0.07 (to $34.75), but the year-over-year increase decelerated to +3.2%. Because the average workweek for all employees on private nonfarm payrolls shrank to 34.3 hours, average weekly earnings fell (-$1.06) to $1,191.93 (+1.7% YoY). With the consumer price index running at an annual growth rate of +3.5% in March, the average worker appears to have lost purchasing power.
* Full-time workers jumped (+949,000) to 133.9 million; there are now nearly 3.1 million more full-time jobs than in February 2020. For perspective, however, the non-institutional working-age civilian population has expanded by 8.4 million during that period. Workers employed part time for economic reasons (shown in the graph above) -- e.g., slack work or business conditions, or could find only part-time work -- rose by 161,000, while those working part time for non-economic reasons slumped (-649,000). Multiple-job holders: -93,000; there are now 362,000 more multi-job holders than in February 2020.
For a “sanity test” of the job numbers, we consult
employment withholding/FICA taxes published by the U.S. Treasury.
Although “noisy” and highly seasonal, the data show the amount withheld in April
decreased by $43.0 billion, to $276.3 billion (-13.6% MoM; +16.5% YoY). To
reduce some of the monthly volatility and determine broader trends, we average
the most recent three months of data and estimate a percentage change from the
same months in the previous year; the average of the three months ending April was
up 8.3% from the year-earlier average.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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