May 6, 2011

The April Employment Situation Report (050611, Morning) 9.0% Unemployment, +244K Jobs

Filed under: Economy,Taxes & Government — Tom @ 8:27 am

Preliminary analysis was done here yesterday.

The report will appear here at 8:30 a.m.

HERE IT IS: Good news, bad news (internal links added by me) –

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.

Household Survey Data

The number of unemployed persons, at 13.7 million, changed little in April. The unemployment rate edged up from 8.8 to 9.0 percent over the month but was 0.8 percentage point lower than in November. The labor force also was little changed in April. (See table A-1.)

Establishment Survey Data

Total nonfarm payroll employment increased by 244,000 in April, and the private sector added 268,000 jobs. Employment rose in a number of service-providing industries, manufacturing, and mining. Since a recent low in
February 2010, total payroll employment has grown by 1.8 million. Private sector employment has increased by 2.1 million over the same period. (See table B-1.)

… The change in total nonfarm payroll employment for February was revised from +194,000 to +235,000, and the change for March was revised from +216,000 to +221,000.

The total jobs change was +290,000 (244K plus 41K in February and 5K in March), which means that … wonder of wonders … drum roll, please … 22 months after the recession ended, the economy has finally added seasonally adjusted non-temp jobs — a whole 35,000 of ‘em:

TotalVsTempJobsSince0609

Imagine that.

The overall scoreboard since the recession ended:

  • 500,000 temp jobs added.
  • 426,000 other private-sector jobs added.
  • 391,000 government jobs lost (+39K federal, -60K state, and -370K local).

Now, let’s give credit where due. Yesterday, I didn’t think the economy would add 1.1 million not seasonally adjusted (NSA) jobs in April. It did: 1.169 million in the private sector, and 1.159 million overall. That’s pretty strong, and as I said yesterday, those two numbers “are more important than whatever results come out of the SA (seasonally-adjusted) sausage-making process.”

I agree with Steve at No Runny Eggs that the jobs news should overshadow the unemployment rate increase — for now. Steve also believes, as do I, that the surveys for this month’s reports were mostly conducted before the shock of $4-plus gas hit in many parts of the country, and to an extent before many of the price-increase announcements on key consumer goods were made.

So April was strong. Sustaining the improvement in May remains problematic.

___________________________________

UPDATE: Tempering the enthusiasm a bit — Greg in the comments points out that the Birth/Death model estimated that 175,000 net new otherwise undetectable jobs were created, compared to 141,000 in April 2010. That seems out of line, especially when you consider the large annual comprehensive adjustments of the past few years whose roots can partially be traced to overestimated Birth/Death jobs. A couple of the Birth/Death components look shaky. 67,000 in leisure and hospitality? 25,000 in construction, up from 8,000 last year? To be clear, Birth/Death is part of the not seasonally adjusted number, so discounting it by 50% would still leave an acceptable just under 1.1 million jobs added on the ground. Cutting Birth/Death in half would almost definitely have taken the seasonally adjusted number below 200,000 (both private and overall), and would be curbing the expected establishment press enthusiasm by a few notches.

UPDATE: The Department of Rounding Inspection informs me up reviewing BLS Table A-1 that the unemployment rate went from 8.828% in March to 8.960% in April, a change of .132%. Team Obama caught a bad break in the rounded-off unemployment rate change.

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11 Comments

  1. [...] Tom Blumer noted that, along with upward-adjustments in the numbers reported for February and March, we finally have [...]

    Pingback by No Runny Eggs » Blog Archive » Mostly-positive monthly jobs news – +244K jobs, +268K private-sector — May 6, 2011 @ 9:05 am

  2. Hey, Times are tough for some but not all, in the board room there is no great depression….. Read about CEOs at the nation’s largest companies were paid better last year than they were in 2007, when the economy was booming, the stock market set a record high and unemployment was roughly half what it is today.

    http://www.google.com/hostednews/ap/article/ALeqM5idK12xk6O-kw2O_OkQlDtQjtTvqA?docId=bfc40d3b4164412fbfd8543c376344ce

    Comment by Greg — May 6, 2011 @ 9:40 am

  3. How long can the increasing concentration of wealth go before people start waking up to the idea that phat-cat GOP’ers are setting up the political agenda in America to pursue a largely corporate owner-oriented economy?

    Comment by Greg — May 6, 2011 @ 9:42 am

  4. Look at Table A.15 and youwill see the Alternate Measures of Labor Underutilization still shows 15.9% unemployment, which is up 2-10th’s of a percent for the month. And, of the increase of 244-thousand, a full 175-thousand was estimated into existence by the CES Birth/Death Model. ( NOT BELIEVEABLE! )

    Leisure & hospitality hiring was up 67,000 for the month ( SURE!) no doubt to be able to handle all those long and expensive vacations we can all so easily afford nowadays. And Professional and Business Services are up 57,000 but I thought those were mostly online from India….(wink, wink, they are..).

    Number of people employed? 139,674,000. I don’t have to remind you that we have about the same number of people working today than we did in August of 2004 when it was 139,573,000.

    Labor Force then was 147,564,000, versus today’s 153,421 which would be a lot higher, but jobjacks to India etc are real. Ask anyone who used to work in the industry formerly call I.T….

    Comment by Greg — May 6, 2011 @ 9:54 am

  5. #2 and #3, if you think this if “fat-cat GOP” driven, you haven’t been paying attention to which party is benefitting from their individual and corporate PAC contributions. Look at Dauman at Viacom — until very recently, the vast majority of his money went to Dems and RINOs.

    There are fundamental problems with boardroom accountability and monitoring which shareholders need to address, but you should also recognize that a Democrat-driven, crony-capitalist economy is artificially creating many of these winners. Bankers and Wall Streeters strongly lean Democrat.

    Comment by TBlumer — May 6, 2011 @ 9:55 am

  6. #4, good points. See my update. The Birth/Death is part of the NSA number, which is then seasonalized. As such, if cut in half, it would have brought the seasonally adjusted numbers below 200K.

    After next year’s comprehensive adjustment, I definitely plan to go back and see what it did to the temp vs. non-temp results. If the adjustment is as much as in previous years, it will push it to month 24 or 25 instead of month 22.

    Comment by TBlumer — May 6, 2011 @ 10:14 am

  7. There are, as you are aware, several indispensable, tell-it-like-it-is investment/economy blogs. One of those, Zero Hedge, has these sentences on the BLS (or BFD as it should be called) jobs report:

    1. Today’s NFP of 244K is great… until you exclude the 62K from McDonalds hirings, and 175K from the Birth Death Adjustment, and end up with…. +7K jobs.

    2. “[T]he total number of persons not in the labor force as an absolute number just hit a new all time record of 86.248 million, higher than the previous record hit in February of 86.216 million.”

    3. [T]he total number of “people who want a job now” jumped by 232,000 from March to April to 6.482 million, just short of the previous record of 6.643 million.”

    Yep, we’re on the path to prosperity! Those economic geniuses in Washington have done it again.

    Comment by boqueronman — May 6, 2011 @ 10:59 am

  8. #7, I try to get to ZH as much as I can, and just haven’t had a chance to because of other things.

    ZH gets a lot right, but I think they’re mostly missing the boat this time:

    1. Both Mickey D’s and Birth/Death would get subtracted from the NOT seasonally adjusted number of 1.1 million plus before seasonalizing. I read somewhere that, despite the sudden press interest, McD’s hires about this many people at this time of year every year, so it’s not valid to subtract them out. Birth/Death is IMO overstated by a factor of two, and by itself would take the seasonally adjusted number to somewhere below +200k. But for ZH to say that these factors net out to +7K seasonally adjusted is embarrassingly wrong.

    2. If the total of people not in the labor force only increases by 32K as far as the eye can see, we’ll be lucky. That’s only 384K per year. It would be better obviously if it stabilized or went down, but lots of Boomers are retiring and taking Social Security.

    3. The “want a job now” number is a legitimate problem and red flag. IMO, it’s a major Going Galt indicator.

    Comment by TBlumer — May 6, 2011 @ 1:03 pm

  9. Related – Fortune just put up a feature story on the permanently temporary worker.

    Comment by steveegg — May 6, 2011 @ 4:30 pm

  10. Thanks Steve. If you look at the graphic above you’ll note that Fortune did some creative rounding to get to “1.7 million … to 2.3 million.”

    The narrative on outsourcing legal help to India was news to me.

    Comment by TBlumer — May 6, 2011 @ 5:22 pm

  11. [...] This morning, I classified the April employment report as “strong,” and in the context of what we’ve seen in the past few years, it was. Later, I tempered my enthusiasm a bit when a commenter pointed out that the Birth/Death estimate for the month was +175,000, which seems ridiculously high by a factor of at least two. [...]

    Pingback by BizzyBlog — May 6, 2011 @ 9:31 pm

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