BLS

BLS

With 268,000 private non-farm employment gains, the April 2011 blew the socks off of all the pessimistic pundit predictions including Econintersect’s forecast of 150,000. The gains were widespread across most economic sectors.

Nonfarm payroll employment rose by 244,000 in April, and the unemployment rate edged up to 9.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several service providing industries, manufacturing, and mining.

Despite the great headline numbers, the elements which drive the economic expansion were weak.
In the latest BLS report employment-population ratio edged down slightly from 58.5% to 58.4% (reversing last months increase) – and the labor force participation rate remains constant at 64.2%). These ratios tell you that the percent of the population or workforce unemployed did not change.
Econintersect does not like the BLS methodology of determining unemployment – only participation rates or employment-populations ratios tell you what is really going on with unemployment. But for those who like to read this the headline U-3 unemployment rate rose from 8.8% to 9.0%. The all in U-6 unemployment rate rose from 15.7% to 15.9% reversing last months gain.
Average hours worked remain unchanged at 34.3 – a rising number indicates an expanding economy.
The Federal Government’s employment levels fell 2,000, with state and local government employment falling an additional 22,000. Many of these could have reappeared in private sector employment as outsourcing. Government remains the headwinds to economic growth.
The big contributors to employment growth this month is retail trade (57,000), professional and business services (51,000), education and health (49,000), and leisure and hospitality (46,000).
Economic markers – those Econintersect uses to benchmark economic growth were mediocre. The transport sector employment is up 0.1%. The support services industry (including temporary help) rose 0.22%. Econintersect believes the transport sector is a forward indicator implying the future is flat jobs growth. Others look at temporary help as a forward indicator.
A nice gain in manufacturing of 29,000 and up nicely from 17,000 last month.
The unemployment rate for people between 20 and 24 fell from 15.0% to 14.9%.

Again Econintersect points out that although there can be a low correlation in a particular month, the different methodologies tend to balance out, and the correlations are excellentoutside of the data turning points. We are now 15 months past the post recession turning point in employment.

The National Federation of Independent Business (NFIB) Chief Economist William Dunkelberg commentedon the employment situation:


“Four months into 2011, the trajectory for small-business hiring appears inconsistent and disappointing. February and March gave us some hope, but in April, the average number of net new jobs slipped from 0.17 per firm to 0.04. With fewer increases in new hires and more reports of shrinkage in workforces, we can expect the April job numbers to be a disappointment.

“Drilling down into the (seasonally adjusted) numbers:
8 percent of those surveyed increased employment;
15 percent reduced employment; and,
14 percent reported unfilled job openings, down 1 point from last month.

“And the outlook for future employment growth remains unchanged from March: Only 16 percent plan to increase employment, and 6 percent plan to reduce their workforce, yielding a seasonally adjusted net 2 percent of owners planning to create new jobs in the next three months.

“The small-business community is still hurting. If the unemployment rate falls, it will certainly not be a result of strong economic growth.”

Many pundits are out there telling you the gain in unemployment numbers were caused by more people looking for work because the economy is improving. These same pundits should explain why the U-6 unemployment numbers gained also. The point here is that the determination of who is unemployed is a matter of definition.

But what is indisputable is the employment-populations ratios. The good news is that it is no longer falling. The bad news is that, despite many good months of employment gains, these ratios are flat.

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