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Jobs Up By 288K in April As Unemployment Rate Plummets

by May 2, 2014, 9:53 am ET

Econ Index April 2014The unemployment rate plummeted in April to the lowest point in more than five years as the U.S. economy added an unexpectedly large 288,000 jobs during the month.

All but the most optimistic of economists expected the jobs numbers to be strong, but nowhere near 300k, with the consensus of surveys placing the increase in the range of 210,000 to 220,000. The unemployment rate was forecast to decline only by a tenth of a point from March’s 6.7 percent.

Instead, the Bureau of Labor Statistics report released this morning said unemployment dropped almost across the board, with lower rates for whites, blacks, Hispanics, men, women and teenagers. However, the sharp decline in the unemployment rate was due mostly to the 806,000 who left the labor force and were therefore not counted as unemployed.

(Calculating the unemployment rate is tricky, and depends on how people respond to a Labor Department survey regarding when and if they looked for work or were employed during a particular period of time. Those who report neither looking for work nor working are considered no longer in the workforce.)

Further tempering the enthusiasm of investors and analysts was the lack of growth in hourly wages (meaning consumer spending power didn’t improve). The average hourly wage of all non-farm workers in April remained at $24.31. In the last year, the average has increased by 1.9 percent. A second cautionary indication was that the average workweek for all workers stayed at 34.5 hours; for manufacturing workers. the workweek declined by .2 hours.

Despite the statistical tempering of the decline in the unemployment rate and the earnings and workweek hours — all of which are a snapshot of a single month — the job growth is being seen by economists as a positive sign of an economy picking up steam after a brutal winter.

Michelle Meyer, senior United States economist at Bank of America Merrill Lynch, told The New York Times that the jobs report and other evidence points to improvement. “The second quarter seems to be starting out on a healthy footing.”

The government report showed the jobs increase was widespread across most occupations and industries. The BLS also adjusted upward job numbers for February and March by a net 36,000. Private sector hiring came in at 273,000 new jobs.

Most of the growth came, as is usual, in the service sector, which increased by 220,000. Manufacturing added 12,000 jobs, while the goods-producing sector as a whole grew by a total of 53,000 jobs.

The Professional and Business services category was the biggest gainer adding  75,000 jobs. The industries covered by this group include temp employment, which is a closely watched segment since hiring here is considered of future, perm hiring. Temp agencies added 24,000 workers.

Also in the professional and business services category is counted management jobs, which increased by 11,900, and professional jobs, such as accounting, legal, and computer. These grew by a net 25,100.

Other significant increases came in:

  • Retail, up by 34,500 with 10,500 coming from hiring by clothing and clothing accessories stores. That offset a similar cut in jobs in electronics and appliance stores.
  • Healthcare +18,700;
  • Bars and restaurants +32,600;
  • Local governments +17,000.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://www.perrymartel.com David Perry

    John,

    I agree with you, while the headline preaches growth the reality is the sharp decline in the unemployment rate was due mostly to the 806,000 who left the labor force and were therefore not counted as unemployed – statistically they aren’t counted.

    It still confounds me that few people notice or comment on the numbers very few ever report on: http://www.bls.gov/news.release/jolts.t01.htm [Table 1. Job openings levels and rates by industry and region, seasonally adjusted].

    But sometimes the true scale of the unemployment problem can get lost in the abstract manner in which we collectively discuss the issue. We get detached from the human tragedy by impersonal preoccupation with statistics, percentages, estimates or forecasts. Did you know that just 28 million unemployed people – roughly ¼ of those without a job – is the equivalent to every man, woman and child living in the 7 largest cities in America: New York, Los Angeles, Chicago, Houston, Philadelphia, Phoenix, and San Antonio.

    That the ‘Great Recession’ has been an economic catastrophe for jobless and underemployed American workers and their families is an understatement. Joblessness not only leaves deep scars on people — financially and psychologically — but also has enduring effects on families, communities and society. Beyond the personal suffering, the despair of the unemployed undermines their trust of employers, the economy and government.

    America’s prospects are dimming:

    • Between 2001 and 2011, the trade deficit with China eliminated or displaced more than 2.7 million U.S. jobs, over 2.1 million of which (76.9 percent) were in manufacturing. These lost manufacturing jobs account for more than half of all U.S. manufacturing jobs lost or displaced between 2001 and 2011.
    • 47+ million Americans are on food stamps (Note: In the 1970s, about one out of every 50 Americans was on food stamps. Today one out of every 6.5 is on food stamps. In 2011 food stamps cost was $76 billion).

    Having 47.7 million people living below the poverty line is equal to every man, woman and child living in the 60 largest cities in America.

    Detroit – once the Crown Jewel of America’s manufacturing industry – has long-term debt estimated to be upwards of $20 billion. Investors say the bankruptcy will make it more difficult for cities and towns everywhere to raise the money they need to build bridges, schools and other infrastructure.

    That is the true cost of having nearly 50% of working age Americans on the sidelines.

    Thanks for the update John.

  • Richard Araujo

    I’m glad I’m not the only one who noticed nearly a million people were simply dropped and not counted. I would disagree in part with one of the other points David raised. To the point about China, there is no such thing as an ‘american’ job. No one owns a job, it’s an opportunity. The division of labor and comparative advantage would demand that job locations be fluid, and laws of economics don’t care about borders all that much. The real question is not why have so many jobs ‘moved’ to China, but why isn’t the labor being re employed in other opportunities? There’s no shortage of things to do in this world, and the well of human want never runs dry. So when you really think about, jobs are one of the things for which there should never be a shortage. So, jobs opening up in China is not a bad thing, choked off opportunity here in the US is a bad thing.

    There’s no real way to know a priori what jobs ‘should’ be in China vs here in the US. Nor is a deficit necessarily evil in and of itself due to the vagueries of what is being imported vs exported and where to; there isn’t a one-for-one relationship between the two, one can import raw materials from one country and not send much back, but sell finished goods to another country altogether. Trade deficits driven by artificial currency manipulation though, those can be a problem. Right now the US relationship with China is a simple one. They buy US debt, the US uses the ‘credit’ to buy goods made in Chinese sweat shops. It won’t last because it can’t. What happens when the Chinese wise up and stop buying the debt is what we should worry about.

  • http://www.viletinternational.com Jacque Vilet

    Jobs today are not “moving” to China. Manufacturing yes —- although there is a lot of hype of “re-shoring” mostly for political reasons.
    Companies are “hiring” not “moving” jobs overseas. I guess Americans either don’t know or refuse to accept that 40-60% of revenues of both large and medium sized U.S. companies are coming from overseas. And contrary to what most Americans think —- companies don’t send Americans overseas to fill jobs that have to be done there. The cost would be ASTRONOMICAL and Americans are not “street savvy”. Our business models don’t work over there.

    Also contrary to what most Americans believe there are talented/educated people overseas. American companies hire them over there — not over here. Sales, Marketing, Engineering (because design are overseas now) —- none of this can be done from the U.S.

    So to say that companies are “moving” jobs is not true. No American is losing a job to overseas work. Fact: Jobs now are overseas — not here.

    The jobs here are now mostly service jobs — and most are jobs that cannot be done overseas. Restaurants, hotels, administrative, healthcare, education, government, trade skills, etc. These are the bulk of jobs available. The STEM stuff is way overblown. IEEE even says there are more than enough STEM types available for jobs here.

    I don’t usually do this but read: http://www.tlnt.com/2013/03/14/why-are-companies-hiring-overseas-theyre-going-where-revenues-are/

  • Richard Araujo

    @ Jacque,
    “I don’t usually do this but read: http://www.tlnt.com/2013/03/14/why-are-companies-hiring-overseas-theyre-going-where-revenues-are/

    Well said, and interesting article. When this topic comes up in conversation I’ve always pointed out that a currency crisis usually resolves itself in a massive war and/or redistributed purchasing power. Usually redistributed to developing nations with good manufacturing bases. In short order, the Chinese will be making stuff for themselves, and not for US consumers.

    I’m a big proponent of telling employers to pull their thumbs out of their rear ends and to pay their employees a fair wage and treat them well. I’m also a proponent of telling employees that jobs are not owed or owned. They are opportunities. That they open up elsewhere is not a problem, that they don’t open up where you are is a problem. Find out what’s causing them to not open, end it, and you’ll have your jobs.

  • http://www.viletinternational.com Jacque Vilet

    Richard —- It bothers me to see the bulk of jobs opening up now are not high paying. A few (it’s all relative)are high paying but the bulk are not. Just imagine how many healthcare (not the high paying jobs but aides, etc) workers will be needed when the Boomers start needing nursing homes, etc. I know this is in the future —- but what will happen when 3D replaces mfg? That bothers me too. So I guess the question (at least in my mind) —- how does the U.S. create new/old jobs to take care of all the people whose jobs are not here anymore? I need to stop worrying!!

  • Richard Araujo

    @ Jacque,

    It’s understandable to be worried, but to me it’s also like worrying about all the food carrying jobs that got eliminated when someone invented the wheel. The US doesn’t need to create jobs, jobs tend to create themselves as long as people stay enough out of the way to allow them to open. There’s no shortage of want, no shortage of things to do, or things that need to be done. It’s only the means needed to get things done – like labor – that are scarce. Technically it should be going up in value.

    Personally I think the US dollar’s purchasing power is going down while the power of other currencies is going up, and US foreign policy of Do What We Want Or We’ll Bomb You is wearing very thin on the rest of the world. They are happy to make and sell things to each other for real money, they don’t need to make things and sell them to the US on ‘credit’ gotten from them to begin with. In the end the US economy will tank for the same reasons the old USSR’s did. Too much military spending, real tax rates that are through the roof, most of which gets redistributed to people who are already rich as hell, and a government so hell bent on controlling every aspect of its citizens’ lives that nobody can ever really get anything done. Opportunities will get strangled in favor of making sure this or that ‘correct’ form and license application is filled out and processed, for a fee of course.

    Starting a business here is hell, competing in already established markets is close to impossible for most people. I remember a while back I looked in to what it would take to get a winery going. I wasn’t interested in going big, I’ve just always liked making wine and I make it better than most of what you can get in the store. I had friends whose families were in the restaurant business. The plan was to do small production, get it out to the stores, make a small profit. If it turned into a business, cool. If not, I would be happy to be able to do something I love on a small scale. The licensing and bonding procedures are a damn labyrinth, I got as many different answers as people I asked, including from the government, as to how to get it done, what to do first, etc. A friend who owns a winery told me honestly, you just have to hire a lawyer and have him/her bash their head against it until you get the bonding/permits. Easily thousands of dollars on top of the fees. Then you have never ending inspections, renewals, and FDA controls over everything because you might be bootlegging or selling that crap to ten year olds…

    My hat is off to anyone who can get through the maze and morass of BS in the US to start a business. That could have something to do with why jobs here are going down the tubes, increasingly the only entities who can create them are mega corporations. And for every private sector job created there’s three bureaucrat jobs created just to make sure the proper paperwork is filled out.

  • http://www.canrig.com Larry Bradley

    There is no joy in Mudville for the 14% (+) who are not included in the basic unemployment rate and who have given up looking for work. We rejoice in a “candidates’ market” at the risk of forgetting about a far larger group for whom there is no rejoicing.

    I am reminded of the last government “shut-down” when “non-essential” employees were told to not report to work. The job market might be good for the “essential” workers in the economy, but the “non-essentials” have been carved out and forgotten over the course of the past six years by policies that have destroyed far more jobs than have been added back by the pseudo-recovery. No “candidates’ market” for *them*.