THE BASIS POINT

Inside The April BLS Jobs Report

This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which included the 12th of the month.

Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.

– Nominal Nonfarm jobs was +165,000. (E). The two previous months’ gains were revised to +138,000 (March) and +332,000 (February). Those had been +88,000 (March) and +268,000. That is a gain (for March and February) of 114,000 from the previous report making the net gain in jobs since the last report of 279,000.

– Real (population adjusted) job growth in April was 165,000. This accounts for the changes for February and March which were significant.

– the Unemployment Rate was 7.510% down from 7.574% in March 2013(B).

– Average hourly earnings was $23.83 up from $23.82 in March 2013 (E)

– Average work week was 34.6 hours up from 34.5 hours March 2013 (E)

– Private jobs were +176,000. Government jobs were -11,000 (E)

-Good producing jobs were -9,000. The two previous months were revised to +15,000 and +75,000. (E)

-The size of the civilian labor force rose from 155,028,000 to 155,238,000 an increase of 210,000. (H)

– The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was flat at 63.3.%. It was 63.6% a year ago (H). This, not the unemployment rate, is the number which should get everyone’s attention. It is this 63.3% of the adult noninstitutionalized population who get pay checks and contribute to GDP.

– the size of the civilian noninstitutional adult population increased by 180,000 in April to 245,175,000 (H). With a labor participation rate of 63.3% 113,940 more jobs were necessary to keep pace with population growth. We had 165,000 more jobs added than that including the changes from February and March. (H) The Employment/Population ratio was 58.6% up from 58.5% the previous month.

The civilian noninstitutional population is 2,391,000 (H) more than 12 months ago. With a labor participation rate of 63.5% we require 1,518,000 more jobs in the past 12 months to keep pace with population growth. We had 1,654,000 (H) more folks working. The increase in real (population adjusted) jobs in the past year is 136,000.

According to the 4 week moving average of Initial Jobless Claims, 1,369,000 people lost their jobs in the last 4 weeks. That normalizes to 1,483,000 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is down from the previous month’s 1,535,000 jobs lost/month.

In April 2013 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 6,410,000 up 81,000 from March’s Job Losers and down 470,000 from April 2012. (H)

– Job leavers was 864,000. This includes anyone who retired or voluntarily left working. This down 122,000 from previous month and down 25,000 from April 2012. (H)

-Reentrants was 3,151,000. Reentrants are previously employed people who were looking for a job and found one. This was -25,000 from the previous month and -185000 from April 2012.(H)

-New entrants were 1,280,000. These are people who never worked before and who are entering the labor force for the first time. This was -+30,000 from previous month and -82,000 from April 2012.

The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 279,000 more people are working

– 210,000 more people are in the civilian labor force

The unemployment rate fell 0.064% despite the labor force increasing. We are +136,000 real (population adjusted) jobs for the past 12 months.

The economy is failing to produce jobs for people entering the labor force for the first time. A sizable piece of the increase in jobs last month (122,000 out of 165,000) was due to fewer people leaving their jobs. While this report looks good on the surface the fact is that we still have underlying serious issues with the jobs market. These issues are structural not cyclical.

Most telling is the fact that markets are cheering a headline of +165,000. If we are cheering +165,000 it is only because expectations are dismal.

The U.S. economy is no longer producing jobs for folks who do not have a college degree or recognized trade skills. Jobs performed by those without education or skills are either being automated or offshored. The very large increases in the cost of college education are making education less affordable as it becomes more necessary.
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Reference:
RATE REACTION TO TODAY’S JOBS REPORT