Comments on April Employment Report

The headline jobs number in the April employment report was above expectations, however employment for the previous two months was revised down by 149,000, combined.  The participation rate and employment population ratio were unchanged, and the unemployment rate decreased to 3.4%.

This is the lowest unemployment rate since 1969 (over 50 years ago), and the unemployment rate hasn't been lower since 1953!  (70 years ago).

Leisure and hospitality gained 31 thousand jobs in March.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 402 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 95% all of the jobs lost in March and April 2020. 

Construction employment increased 15 thousand and is now 295 thousand above the pre-pandemic level. 

Manufacturing employment increased 11 thousand jobs and is now 206 thousand above the pre-pandemic level.

Earlier: April Employment Report: 253 thousand Jobs, 3.4% Unemployment Rate

In April, the year-over-year employment change was 4.00 million jobs.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 participation rate was increased in April to 83.3% from 83.1% in March, and the 25 to 54 employment population ratio increased to 80.8% from 80.7% the previous month.

Both are slightly above the pre-pandemic levels and suggest all of the prime age workers have returned to the labor force.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.4% YoY in April. 

Year-over-year wage growth will likely slow further over the next few months.

Part Time for Economic Reasons

From the BLS report:

"The number of persons employed part time for economic reasons, at 3.9 million, was little changed in April. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in April to 3.903 million from 4.102 million in March. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.6% from 6.7% in the previous month. This is down from the record high in April 22.9% and up slightly from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is below the level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.156 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.104 million the previous month.

This is at pre-pandemic levels.

Summary:

The headline monthly jobs number was above expectations; however, employment for the previous two months was revised down by 149,000, combined.   The headline unemployment rate decreased to 3.4% - the lowest in over 50 years!

Overall this was another solid employment report, however, including the substantial downward revisions, this employment report was weaker than expected.