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Economy in Brief

U.S. Payroll Employment Gain Picks Up Steam; Jobless Rate is Lowest Since 2008
by Tom Moeller  May 2, 2014

Employers became more optimistic in April and boosted workforces by 288,000 following a 203,000 March rise, initially reported as 192,000. The rise was the strongest since January 2012 and easily outpaced expectations for a 210,000 increase in the Action Economics Forecast Survey. The unemployment rate fell sharply to 6.3% versus expectations for a dip to 6.6%. The total jobless rate, including workers who were marginally attached plus part-time for economic reasons, declined to 12.3% as individuals left the labor force in droves. Average hourly earnings were unchanged (1.9% y/y).

From the establishment survey, the 288,000 increase in employment was broad-based. Construction jobs advanced a firm 32,000 (3.3% y/y) though factory sector jobs grew a moderate 12,000 (0.8% y/y). Employment in the private service sector picked up 220,000 (2.1% y/y), the strongest rise since May of last year. It was led by a 75,000 gain (3.6% y/y) in professional & business services which was helped by a 24,000 gain (9.3% y/y) in temporary positions. Education & health services employment grew 40,000 (1.6% y/y) while leisure & hospitality jobs advanced 28,000 (2.9% y/y). Retail trade jobs grew 34,500 (2.2% y/y) but employment in the financial services industry grew just 6,000 (0.7% y/y). Government sector employment rose 15,000 (-0.0% y/y) reflecting a 17,000 rise (0.5% y/y) in local jobs, a 1,000 uptick (0.2% y/y) in state employment. Federal sector positions declined by 3,000 (-3.0% y/y).

Over a one-month span, 67.0% of private industries added to employment, near the recovery high. Moreover, 72.9% added to payrolls over a six-month span. A moderate 58.6% of manufacturing industries raised employment levels.

The length of the average workweek held steady at 34.5 hours, though that was the longest workweek of the economic expansion. The private services workweek held at 33.3 hours while the goods producing sector's workweek dipped to 40.5 hours.

Average hourly earnings also were unchanged at $24.31 (1.9% y/y). Wages in the goods producing industries slipped 0.1% to $25.59 per hour (+2.4% y/y) while private service sector earnings were unchanged at $24.01 per hour (1.7% y/y).

From the household survey, the unemployment rate's decline to 6.3% was to the lowest level since September 2008. It reflected a 73,000 worker decline (+1.4% y/y) in employment and an 806,000 drop in the labor force which was unchanged y/y. Those who have chosen to stay out of the labor force rose 2.5% y/y. The employment-to-population ratio was modestly higher last month at 58.9%, though it had been as high as 63.1% in 2006.

While the population rose to 247,439 last month, the labor force decline pulled the participation rate down to 62.8%, matching the lowest level since March 1978. But gender matters. The labor force participation rate for males has been falling steadily throughout the postwar period. For women, however, the rate had been steadily rising to 60.0% in 1999. It since has backtracked moderately to 56.9%.

The unemployment rate for those with less than a high school diploma fell sharply to 8.9%, but here the labor force fell by 308,000 (-0.6% y/y). For high school graduates with no college, the rate was stable at 6.3% but the labor force fell 303,000 (-0.4% y/y). For individuals with some college but less than a bachelors degree, the jobless rate dropped to 5.7% and the labor force grew 206,000 (0.1% y/y). For college graduates, the unemployment rate was 3.3% as the labor force grew 26,000 (1.0% y/y).

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.

Employment: (M/M Chg., 000s) Apr Mar Feb Y/Y 2013 2012 2011
Payroll Employment 288 203 222 1.7% 1.7% 1.7% 1.2%
 Previous -- 192 197 -- -- -- --
 Manufacturing 12 7 20 0.8 0.7 1.7 1.7
 Construction 32 17 24 3.3 3.3 2.1 0.2
 Private Service Producing 220 173 153 2.1 2.2 2.2 1.9
 Government 15 1 21 -0.0 -0.3 -0.8 -1.8
Average Weekly Hours - Private Sector 34.5 34.5 34.3 34.4
(Apr'13)
34.5 34.4 34.3
Average Private Sector Hourly Earnings (%) 0.0 0.1 0.3 1.9 2.1 1.9 2.0
Unemployment Rate (%) 6.3 6.7 6.7 7.5
(Apr'13)
7.4 8.1 8.9
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