by Calculated Risk on 5/04/2007 08:39:00 AM

The BLS reports: U.S. nonfarm payrolls rose by 88,000 in March, after a downward revised 177,000 gain in February. The unemployment rate increased slightly to 4.5% in April.

Click on graph for larger image.

Here is the cumulative nonfarm job growth for Bush's 2nd term. The gray area represents the expected job growth (from 6 million to 10 million jobs over the four year term). Job growth has been solid for the last 2 1/4 years and is near the top of the expected range.

The following two graphs are the areas I've been watching closely: residential construction and retail employment.


Residential construction employment decreased by 4,100 jobs in April, and including downward revisions to previous months, is down 139.5 thousand, or about 4.1%, from the peak in March 2006. This is probably just the beginning of the loss of hundreds of thousands of residential construction jobs over the next year or so.

Note the scale doesn't start from zero: this is to better show the change in employment.


Retail employment lost 26,100 jobs in April. As the graph shows, retail employment has turned positive in recent months. YoY retail employment has also turned positive.

Overall this is a somewhat weak report. With the revisions to prior months, the economy has added 118K net jobs per month for the last three months. The expected job losses in residential construction employment still haven't happened, and any spillover to retail isn't apparent yet. With housing starts off over 30%, and residential construction employment off about 4%, I expect the rate of residential construction job losses to increase over the next few months.