May 6, 2016

April 2016 Jobs Report

Unemployment Rate: 5.0 percent

Unemployed Americans: 7.9 million

Employment and Unemployment

  1. The Department of Labor reported an unemployment rate of 5.0 percent for April, unchanged from last month. It reported an increase of 160,000 nonfarm jobs in April. Today’s job growth figure fell short of analysts’ job growth prediction of 205,000. Employment for February was revised down from 245,000 to 233,000 jobs created; and March was revised down from 215,000 to 208,000. Revisions showed employers added 19,000 fewer jobs in February and March than previously estimated.
  2. As noted in the Wall Street Journal this morning, the “U.S. labor market decelerated in April, a sign employers may be turning cautious after the economy slowed early in the year.”   
  3. In 2016, job gains have averaged 192,000 a month, compared to the average of 229,000 jobs added monthly in 2015.
  4. Unemployment in April among those ages 16-19 was 16.0 percent, up 0.1 percent from the previous month. For people of Hispanic or Latino ethnicity, the unemployment rate was 6.1 percent, up 0.5 percentage points from March. For African-Americans, the unemployment rate was 8.8 percent, down 0.2 percent from the prior month.
  5. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2.1 million. They account for 25.7 percent of the unemployed, down from 27.6 percent in the prior month and down from 28.7 percent a year ago.
  6. The “real” unemployment or U-6 rate is 9.7 percent, down 0.1 percent. This is the total percentage of unemployed and underemployed workers.
  7. The “real” number of unemployed Americans is 15.6 million. These are people who are unemployed (7.9 million), want work but have stopped searching for a job (1.7 million), or are working part time because they cannot find full-time employment (6.0 million).
  8. While the recession ended nearly seven years ago, unemployment rates in most states remain higher than their average annual rate in 2007. The start of the recession was pegged to December 2007, and it ended in June 2009. In 2015, unemployment rates in just 14 states had returned to or fallen below their 2007 averages: Arkansas, Iowa, Kansas, Kentucky, Maine, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, North Dakota, Ohio, Vermont, and Wisconsin. 
  9. In April, employment grew by 65,000 in professional and business services; 44,000 in health care; and 20,000 in financial activities. Employment in government fell by 11,000; and mining fell by 7,000 in April. Over the last year, employment in mining has decreased by 130,200. 

Labor Force Participation

  1. The labor force participation rate is 62.8 percent, down 0.2 from last month and remaining near the lowest level in 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63.0 percent. Prior to the recession, the rate was 66 percent. 
  2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.1 percent.
  3. The share of American adults with jobs in April was 59.7 percent, down 0.2 percent from last month. This is nearly 4 percentage points below its pre-recession peak. 
  4. After raising its main interest rate by 0.25 percent in December 2015, the Federal Reserve appears to be reluctant to make another adjustment. In a statement following the April meeting of the Federal Open Market Committee, the Federal Reserved noted: “The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” The next meeting of the Federal Reserve is June 14-15.  

Wages

  1. In April, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents to $25.53. Over the year, average hourly earnings have risen by 2.5 percent.
  2. April was the 81st straight month that year-over-year hourly wage growth has been at or below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent.

Issue Tags: Economy, Labor