The Bureau of Labor Statistics (BLS) released its report for the month of April this morning. The establishment survey that determines how many jobs were created during the month says that 244,000 non-farm jobs were added in April – an upside surprise. But the household survey, used to measure the unemployment rate, says exactly the opposite. According to that survey, the employment level (the number of people working) actually fell by 190,000, raising the unemployment rate to 9.0% from 8.8% in March.
Here are the figures that go into the unemployment calculation:
And here’s a chart of that data:
As has been the case since the beginning of the recession in late 2008, the BLS continues to hold down the official unemployment rate by denying any growth in the labor force. Until the beginning of the recession, the official size of the labor force corresponded closely with the growth in the population. But as soon as the recession began, the official size of the labor force remained stuck at roughly the same level while the population has grown by about six million. It’s as though the folks at the BLS stopped talking to the folks at the Census Bureau. You can see what I mean from the following chart:
The net result is that the number of unemployed Americans and the percentage of the population that’s unemployed remain stuck close to the worst levels of the recession:
So what will probably be seen as a bullish report early on today will turn negative as the details of the report get more attention.
Here’s a breakdown of the jobs that were “created” in April according to the establishment survey:
- Retail: + 57,000
- Professional & business services: + 51,000
- Temporary help: + 34,000
- Management & technical consulting: + 11,000
- Computer systems design: + 8,000
- Leisure & hospitality services: + 46,000
- Health care: + 37,000
- Manufacturing: + 29,000
- Mining: + 11,000
- Construction: unchanged
This was the fifth consecutive gain in manufacturing. That’s the good news. The continued gains in health care – not so much. Given the pressure to cut health care spending, this sector of the economy is soon headed for a rude awakening. Most of the gain in leisure and hospitality services was in restaurants and bars. Remember the day in April when McDonald’s hired 50,000 workers? That alone would account for all of the jobs added in that sector of the economy.
The truth probably lies somewhere in the middle of these two surveys, which means that there was virtually no growth in employment whatsoever. Economic data has been trending down since the beginning of April. Will employment soon follow? Time will tell.