Employment Situation: Rebound But Still Weaker Than 2016
May 5, 2017
Bottom Line: Payroll Employment rose by 211k in April, compared with market expectations for an increase of 190k. There were modest negative revisions to service sector jobs in the prior two months. April saw a sharp rebound in retail trade (+6k vs. -27k in March) after one-off firings in department store retailers depressed March data. Job creation has averaged 174k over the past 3 months vs. the past 12 months average of 186k. While small each month (-7k in April), net firing in the tech sector over the last year continues and bears watching.
The unemployment rate dropped, as household employment grew more than the increase in the labor force.
Both hourly and weekly earnings rose moderately after a slight increase in March. The workweek rose and the 3-month average is now 34.3. Despite this rebound the trend in average weekly hours for all employees is modestly downward and year-on-year growth in average hourly earnings is holding modestly below the 2016 peaks.
On net, this report, combined with those of the prior two months suggest labor market trends are still solid but a touch weaker than in 2016 and modestly weaker than in 2015.
Payroll Employment rose by 211k in April, compared with market expectations for an increase of 190k. The prior 2 months were revised, lower in March by 19k and higher in February by 13k.
Government jobs ROSE by 17k. Consequently, private sector jobs ROSE by 194k.
Overall employment is now 1.6% ABOVE its year ago level, Over the past 12 months, 2,237k jobs have been created.
- In April, the job gains were in Trade, Transportation & Utilities (+13k with 6k of those in Retail Trade), Professional & Business Services (+39k with the addition of 6k in Temp Help Services), Leisure & Hospitality (+55k), Education & Health Services (+37k), Financial Activities (+19k), Government (+17k), Other Services (+7k), and Manufacturing (+6k).
- Jobs were shed in Information (-7k).
The Unemployment Rate FELL by 0.1 percentage points in April to 4.4%, compared with market expectations for a small increase to 4.6%. Household employment rose by 156k while the labor force increased by 12k, resulting in a decrease in the number of unemployed of 146k.
The Labor Force Participation Rate FELL by 0.1 percentage points to 62.9%.
The Employment-Population Ratio ROSE by 0.1 percentage points to 60.2%.
The number of people Working Part-Time for Economic Reasons FELL by 305k to 5,197k. while Long-Term Unemployment FELL by 61k to 1,626k (accounting for 23.0% of the unemployed), while the Mean Duration of Unemployment FELL by 1.2 weeks to 24.1 weeks.
There are now 7.1 million people officially unemployed. In addition, there are another 5,707k people who say they want a job but are not currently looking for one. Finally, another 5,197k people are working part-time because of slack economic conditions.
Article by Contingent Macro Advisors