05.02.2014 News Releases, Policy Points

US Labor Market Takes A Wild Ride In April

CHAPEL HILL, NC (May 2, 2014) – In April, the national labor market added 288,000 more jobs than it lost (+2.1 percent) due mainly to gains in the private sector. This net gain was the largest one logged in any month since January 2012 and was the third-largest monthly gain recorded since October 2010. Yet the household data painted a more negative picture of the labor market, with the number of employed persons actually declining in April.

“April was the 43rd-straight month in which the United States experienced net job growth,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the year, the economy has netted an average of 197,000 jobs per month, but it still remains 7.1 million jobs short of the total needed to replace the jobs lost since 2007 and to meet subsequent population growth.”

In April, the nation’s employers added 288,000 more payroll jobs than they cut (+2.1 percent). Some 95 percent of the gain came from the private sector (+273,000), while public employers added 15,000 more positions than they cut. Within the private sector, payroll levels rose the most in the professional business services sector (+75,000, with 51.5 percent of the gain occurring in the administrative and waste services subsector), followed by the trade, transportation, and utilities sector (+59,000, with 58.5 percent of the gain occurring in the retail trade subsector) and the education and health services sector (+40,000, with 69.8 percent of the gain occurring in the health care and the social assistance subsector). Payroll levels in the other major industry groups rose or held steady.

Additionally, the payroll employment numbers for February and March underwent revisions; with the updates, the economy netted 425,000 jobs over those two months, not the 389,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 197,000 from 194,000.

“While the United States has experienced steady job growth for the past 3.5 years, the pace of growth has been modest relative to the severity of the job losses caused by the last recession,” noted Quinterno. “The current average monthly rate of job growth is insufficient to close the nation’s jobs gap anytime soon.”

Data from the household survey, meanwhile, offered a more negative picture of the state of the United States’ labor market. In April, the number of Americans who reported having jobs actually decreased by 73,000 persons (-0.1 percent); put differently, fewer people reported having jobs in April than in March. And the overall size of the labor force declined by 806,000 persons between March and April. Compared to March, fewer Americans participated in the labor force in April, and the share of working-age people with a job was unchanged.

In April, 9.8 million Americans were unemployed (6.3 percent), while 7.5 million individuals worked part time despite preferring full-time positions. Another 783,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether. Those persons were part of a larger population of 2.2 million Americans who were marginally attached to the labor force.

Compared to a year ago, 2 million more Americans were working in April, and 1.9 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (58.9 percent) remained at a depressed level, while the share of the population that was participating in the labor force actually decreased over the year, falling to 62.8 percent from 63.4 percent.

Last month, the unemployment rate was higher among adult male workers than female ones (5.9 percent versus 5.7 percent). Unemployment rates were higher among Black (11.6 percent) and Hispanic workers (7.3 percent) than among white ones (5.3 percent). The unemployment rate among teenagers was 19.1 percent.

Additionally, 5.6 percent of all veterans were unemployed in April, and the rate among recent veterans (served after September 2001) was 6.8 percent. At the same time, 12.5 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in April. Last month, the underemployment rate equaled 12.3 percent, down from the 13.9 percent rate logged a year ago. Among unemployed workers, 35.3 percent had been jobless for at least six months (compared to 37.4 percent a year earlier), and the average spell of unemployment equaled 35.1 weeks, down from 36.6 weeks in April 2013.

In April, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 54.1 percent of unemployed persons. Another 27.1 percent of unemployed persons were re-entrants to the labor market, while 10.8 percent were new entrants. Voluntary job leavers accounted for the remaining 8.1 percent of the total.

“The April employment report painted a mixed portrait of the American labor market,” observed Quinterno. “The payroll survey contained positive findings, but the data in the household survey were much more negative. While the economy is netting jobs at a somewhat more robust pace than first thought, it is not adding enough jobs, rapidly enough to provide employment opportunities to all those who want and need work. Even with the recent drops in the unemployment rate, the United States’ jobs crisis remains far from over.”

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