The April Jobs Report is More Complicated than you Think...

Mish Shedlock |

Today we see a snap back from last month's report on both establishment jobs and household survey employment. Last month, the household survey came in at an anemic 34,000. This month has seemingly roared back, at 192,000.

Part-time employment went up by 198,000, meaning the entire increase in household survey employment was part-time.

Finally, March nonfarm payrolls were revised lower from 126,000 to 85,000. However, this snap back is nowhere near as big as it appears at first glance. It will take at least another month to see if weakness in March was the start of an overarching market shift, or simply an outlier.

A Few Interesting Details

The Bloomberg Consensus jobs estimate was for 220,000 jobs...nearly right on target. The estimate range was a wide 180,000 to 335,000.

Bloomberg:

The April employment report is mixed and probably won't be pulling forward expectations for a Fed rate hike. Nonfarm payroll growth came in about as expected, at a soft 223,000. But there is a substantial downward revision to what was already an extremely weak March, from 126,000 to 85,000. The good news is another downtick in the unemployment rate, to 5.4 percent from 5.5 percent and reflecting a favorable mix led by a rise in those finding jobs.

Details of the payroll data show a very large 45,000 rise in what has been a depressed construction sector. This is one of the largest monthly gains of the recovery and may point to springtime acceleration for construction and new housing. Professional business services added a strong 62,000 jobs with temporary services up a solid 16,000 for its best gain of the year.

You cannot (at least, you should not) play the gain in construction both ways. If the weakness was weather-related, then a snap back in construction should have been expected. Some, but not all of the recent weakness was related to weather. Construction probably was more affected than services.

Let's take a look at all the key numbers...

BLS Jobs Statistics at a Glance 

  • Nonfarm Payroll: +233,000 - Establishment Survey
  • Employment: +192,000 - Household Survey
  • Unemployment: -26,000 - Household Survey
  • Involuntary Part-Time Work: -125,000 - Household Survey
  • Voluntary Part-Time Work: +323,000 - Household Survey
  • Baseline Unemployment Rate: -0.1 at 5.4% - Household Survey
  • U-6 unemployment: -0.1 to 10.8% - Household Survey
  • Civilian Non-institutional Population: +186,000
  • Civilian Labor Force: +166,000 - Household Survey
  • Not in Labor Force: +19,000 - Household Survey
  • Participation Rate: +0.1 at 62.8 - Household Survey

 

March 2015 Employment Report 

Please consider the Bureau of Labor Statistics (BLS) Current Employment Report.

Total nonfarm payroll employment increased by 223,000 in April, and the unemployment rate was essentially unchanged at 5.4 percent. Job gains occurred in professional and business services, health care, and construction. Mining employment continued to decline.

Unemployment Rate 

Unemployment_Rate___Seasonally_Adjusted.jpg

 Nonfarm Employment

Employment_in_Total_Nonfarm.jpg

 Nonfarm Employment Change from Previous Month by Job Type

 

Employment_in_Total_Nonfarm_II.jpg

Hours and Wages

Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees declined by 0.1 hour to 33.3 hours. Average hourly earnings of production and non-supervisory private workers rose $0.02 at $20.90. Average hourly earnings of production and non-supervisory private service-providing employees rose $0.02 at $20.69.

Table 15 BLS Alternate Measures of Unemployment

Alternate_Measures_of_Employment.jpg

Notice I said "better" approximation...not to be confused with "good" approximation. The official unemployment rate is 5.4%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. The U-6 row is much higher at 10.8%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Some of those dropping out of the labor force retired because they wanted to retire. The rest can be attributed to a variety of factors that include disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.

 

For more of Mish's insights and opinions on markets in the US and across the globe, follow this link to Mike Shedlock’s blog

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