In a Wall Street Journal survey earlier this week, the consensus of analysts was that the government would report an April gain of 190,000 new non-farm jobs today. The actual, seasonally adjusted tally released this morning was for 263,000. Most of those—236,000—were created in the private sector.
The headline unemployment rate that the Bureau of Labor Statistics labels U3 fell to 3.6% last month, the lowest level since December 1969. A big portion of that drop to near record lows, however, happened because so many people—490,000—left the labor force.
Another gauge, which the BLS labels U6 and includes unemployment as well as underemployment, held steady at 7.3%. April was the 103rd consecutive month of job expansion.
The new jobs tally for February was revised from 33,000 to 56,000; for March it was revised from 196,000 to 189,000.
The bureau includes as employed anyone who has worked even a single hour during the survey period, which takes place around the 12th of each month.
A recent paper from the Dallas Federal Reserve notes:
In labor markets, there has been a rising self- or gig-employment trend, as tracked by the share of households earning enough to pay self-employment tax, as Chart 1 shows. This tax-return-based measure avoids underreporting of gig employment in surveys in which some households report their status as employed even though they’re actually contractors or running a small business.
New technologies that encourage contingent or just-in-time labor (gig employment) lower the bargaining power of workers. This, in turn, lowers the natural rate of unemployment and real equilibrium wages.
Essentially, firms are able to hire contract or self-employed workers, who are not on their payrolls and not counted among the unemployed when not on the job. As a result, the headline measure of unemployment may understate labor slack.
Year over year, average hourly wages have risen 3.2%. At the liberal Economic Policy Institute, Ben Zipperer and David Cooper write:
Last week, The New York Times published an article in “The Upshot” by Ernie Tedeschi, which argues that after accounting for state and local minimum wages, the United States currently has its highest average effective minimum wage ever at $11.80 per hour. The article correctly underscores how after 10 years of inaction at the federal level, so much of the policy work being done to boost wages for low-wage workers is happening at the state and local level. Yet, it is important to recognize that even with state and local governments taking action in many places, there are still millions of workers being paid significantly lower wages than the “average” minimum wage as calculated in the Upshot piece. In fact, raising the federal minimum wage to $11.80 would directly lift wages for 18.6 million workers, or 12.8 percent of the wage-earning workforce. Moreover, calculating the average effective minimum wage is very sensitive to how one defines the workforce affected by the policy. One would arrive at a much lower average minimum wage if considering the broader low-wage workforce for whom minimum wage policy is relevant.
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The BLS bases its monthly count on the Current Employment Survey of 147,000 business establishments. It derives the unemployment rate from another study, the Current Population Survey of 60,000 households. The final day of the surveys falls around the 12th of each month, which means this month’s jobs data actually measure jobs gained in the first part of April and the last part of March.
Other statistics from the April report:
The civilian workforce fell by 490,000 in April, after falling by 224,000 in March and 45,000 in February.
The labor force participation rate fell 0.2 point to 62.8% in April. The employment-population ratio held steady at 60.6%.
Unemployment rates differ by race and sex. (April percentages in bold; March percentages in [brackets].) Adult men: 3.4% [3.6%]; Adult women: 3.1% [3.3%]; Whites: 3.1% [3.4%] ; Blacks: 6.7% [6.7%]; Asians: 2.2% [3.1%]; Hispanics: 4.2% [4.7%]; American Indians: Not counted monthly.
• Average hourly earnings of private-sector production and nonsupervisory employees rose in April by 7 cents an hour to $23.31.
• Average hourly earnings for all employees on private non-farm payrolls in April rose 6 cents an hour to $27.77.
• Average work week for all employees on non-farm payroll fell to 34.4 hours in April.
• The manufacturing work week in April remained steady at 40.7 hours.
April Job Gains and Losses for selected categories:
Professional services:
- Temporary help services: 17,900
- Transportation & warehousing: 11,100
- Financial activities: 12,000
- Leisure & hospitality: 34,000
- Information: -1,000
- Professional and business services: 76,000
- Education and health services: 62,000
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- Health care & social assistance: 52,600
- Retail trade: -12,000 [after an -11,700 drop in March]
- Construction: 33,000
- Manufacturing: 4,000
- Mining and Logging: -3,000
Here's what the seasonally adjusted job growth numbers have looked like in the previous decade compared with this April’s gain of 263,000 jobs.
April 2009: -694,000
April 2010: 237,000
April 2011: 321,000
April 2012: 83,000
April 2013: 192,000
April 2014: 327,000
April 2015: 300,000
April 2016: 211,000
April 2017: 213,000
April 2018: 196,000