Popular Economics Weekly
But government payrolls lost 11,000
jobs, so total nonfarm payroll employment increased just 160,000 in April. Over
the prior 12 months, employment growth had averaged 232,000 per month.
The April jobs
report was well below Wall Street’s expectations. But that is partly
because we are nearing full employment, and 14.5 million jobs have been added
during President Obama’s term already, third best behind Presidents Clinton and
Reagan, and Obama still has 7 month left in his term.
But what is really full employment
when the number of persons employed part time for economic reasons (also
referred to as involuntary part-time workers) was unchanged in April at 6.0
million and has shown little movement since November? These individuals, who
would have preferred full-time employment, were working part time because their
hours had been cut back or because they were unable to find a full-time job.
And 1.7 million persons were
marginally attached to the labor force, said the BLS, down by 400,000 from a
year earlier. (The data are not seasonally adjusted.) These
Individuals were not in the labor force, wanted and were
available for work, and had looked for a job sometime in the prior 12 months.
The unemployment rate, meanwhile,
was flat at 5 percent. More people dropped out of the labor force and the
so-called participation rate fell for the first time in seven months. That
could mean people find it a bit harder to get a job. In April, employment gains
occurred in professional and business services, health care, and financial
activities, while mining continued to lose jobs.
The increase in hiring last month
was the smallest since September. Job creation slowed to an average of 200,000
in the last three months from a five-year high of 282,000 a month in the fourth
quarter. Still, the soft employment report could reduce the odds of the Federal
Reserve raising interest rates in June, say pundits.
The disappointing April employment
report, however, might be a blip. Job openings sit near a record high and a sharp
rebound in auto sales in April suggest consumers are still fairly confident,
said MarketWatch. Businesses are unlikely to hold the line on hiring if sales
continue to rise.
There are also signs of record
consumer spending, as consumer credit levels rose to the highest level in 15
years. Outstanding consumer
credit, a measure of non-real estate debt, rose by a seasonally adjusted
$29.67 billion in March from the prior month, the Federal Reserve said Friday.
The 10.0 percent seasonally adjusted annual growth rate was the fastest growth
pace since November 2001.
Of
particular note was that revolving credit (ie, credit cards) rose 14.2 percent
after remaining in the low single digits since at least 2011. So consumers must finally be confident enough
to use their plastic money.
That’s why
this shows the possibility to higher growth ahead. In both 2014 and 2015, the economy rebounded
smartly in the spring after growth sagged in the first quarter. Many economists
expect a repeat this year. In April,
professional-oriented companies, health care providers and financial firms
added the most new workers. White-collar businesses added 65,000 employees,
health-care firms created 44,000 jobs, and banks and insurance companies padded
payrolls by 20,000.
Yet retailers cut 3,000 jobs to
mark the first drop since the end of 2014. The mining sector, hurt by cheap oil
prices, eliminated another 8,000 jobs to bring total cuts to nearly 200,000 in
the past few years.
Employment gains for March and
February, meanwhile, were reduced by a combined 19,000. The government said
208,000 new jobs were created in March instead of 215,000. February’s gain was
trimmed to 233,000 from 245,000.
Harlan Green © 2016
Follow Harlan
Green on Twitter: https://twitter.com/HarlanGreen
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