05.06.2011 News Releases, Policy Points

A National Labor Market In Flux

CHAPEL HILL (May 6, 2011) – The national economy netted 244,000 payroll positions in April, which marked the seventh consecutive month of job growth. Yet the positive payroll figure masked several troubling developments—developments that point to a potential summer slowdown in the job market. These findings come from today’s national employment report.

“While net job growth of 244,000 positions in April represents a step forward, the labor market also took a few steps back,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Despite the job growth, the share of the working-age population that is employed remains near a historic low, and a new round of job displacement appears to be taking shape.”

In April, the nation’s employers added 244,000 more payroll positions than they cut. Gains occurred entirely within the private sector (+268,000), while government payrolls fell by 24,000 positions due to cuts by local and state governments. In recent months, public-sector payroll cuts have weighed down job growth. Also, the payroll employment numbers for February and March were revised upward. With the revisions, the economy netted 456,000 jobs over those two months rather than the 410,000 positions previously reported.

Private-sector job gains in April occurred primarily in retail trade (+57,100), professional and business services (+51,000), education and health services (+49,000), and leisure and hospitality services (+46,000, primarily in the accommodations and food services subsector). All other private-sector industries either grew slightly or held steady in April.

“The April employment report suggests that a level of job growth has taken hold in the United States,” noted Quinterno. “Over the past three months, net job growth has averaged 233,000 positions, but that pace is insufficient to undo the recession’s damage anytime soon.”

The inability of the current pace of job growth to alter employment conditions was reflected in the April household survey. Last month, 13.7 million Americans (9 percent of the labor force) were jobless and seeking work. While the unemployment rate and number of unemployed individuals dropped over the past year, so did the share of the population participating in the labor market. In April, the share of the population participating in the labor force (64.2 percent) was at a level last seen in the early 1980s.

Another cause for concern was the fact the number of newly unemployed individuals rose in April. Last month, 20 percent of all unemployed individuals had been jobless for less than 5 weeks. This share has been trending upward since December, which suggests that a new round of worker displacements is taking shape.

In April, proportionally more adult male workers were unemployed than female ones (8.8 percent vs. 7.9 percent). Similarly, unemployment rates were higher among Black (16.1 percent) and Hispanic workers (11.8 percent) than among White ones (8 percent). The unemployment rate among teenagers was 24.9 percent. Between March and April, unemployment rates for most every major demographic group were little changed.

Additionally, 7.7 percent of all veterans were unemployed in April. The unemployment rate among recent veterans (served after September 2001) was 10.9 percent.

“Despite the growth in payroll employment, jobs remained difficult to find in April,” added Quinterno. “Last month, the underemployment rate equaled 15.9 percent. Among unemployed workers, 43.4 percent had been jobless for at least six months with the average spell of unemployment lasting for 38.3 weeks.”

“The April employment report suggests that labor market conditions have stabilized and that the private sector is adding jobs, though a significant share of that growth is being canceled out by job losses in the public sector,” observed Quinterno. “Unfortunately, recent improvements are not good enough to reverse the damage caused by the recession. Other signs in the April report, meanwhile, point to a possible softening of the labor market over the summer months.”

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