Initial Reaction
Last month, the BLS stated job gains were 196,0000 while employment fell by 201,000. The wild fluctuations continue this month as the discrepancy between the two surveys widened further.
The unemployemnt rate is down as people are dropping out of the labor force like mad.
Last month, the labor force fell by 224,000. This month, the labor force shed another 490,000. Last month, those not in the labor force rose by 369,000. This month, the number is 646,000.
Job Revisions
The change in total nonfarm payroll employment for February was revised up from +33,000 to +56,000, and the change for March was revised down from +196,000 to +189,000. With these revisions, employment gains in February and March combined were 16,000 more than previously reported.
BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +263,000 – Establishment Survey
- Employment: -103,000 – Household Survey
- Unemployment: -387,000 – Household Survey
- Involuntary Part-Time Work: +155,000 – Household Survey
- Voluntary Part-Time Work: +25,000 – Household Survey
- Baseline Unemployment Rate: 3.6% – Household Survey
- U-6 unemployment: Unchanged at 7.3% – Household Survey
- Civilian Non-institutional Population: +156,000
- Civilian Labor Force: -490,000 – Household Survey
- Not in Labor Force: +646,000 – Household Survey
- Participation Rate: -0.2 to 62.8% – Household Survey
Employment Report Statement
Total nonfarm payroll employment increased by 263,000 in April, and the unemployment rate declined to 3.6 percent. Notable job gains occurred in professional and business services, construction, health care, and social assistance.
Unemployment Rate – Seasonally Adjusted
The above Unemployment Rate Chart is from the BLS. Click on the link for an interactive chart.
Nonfarm Employment Change from Previous Month
Hours and Wages
Average weekly hours of all private employees fell 0.1 hour to 34.4 hours. Average weekly hours of all private service-providing employees was flat at 33.3 hours. Average weekly hours of manufacturers was flat at 40.7 hours.
Average Hourly Earnings of All Nonfarm Workers rose $0.06 to $27.77. That a 0.22% gain. Average hourly earnings of private service-providing employees rose $0.06 to $27.53, a gain of 0.22%. Average hourly earnings of manufacturers rose $0.02 to $27.47, a gain of 0.07%.
Average hourly earnings of Production and Supervisory Workers rose $0.07 to $23.31. That’s a 0.30% gain. Average hourly earnings of private service-providing employees rose $0.07 to $23.03, a gain of 0.30%. Average hourly earnings of manufacturers rose $0.03 to $21.97, a gain of 0.14%
Year-Over-Year Wage Growth
- All Private Nonfarm from $26.90 to $27.77, a gain of 3.2%
- All production and supervisory from $22.55 to $23.31, a gain of 3.4%.
For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will comment further.
Table 15 BLS Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said “better” approximation not to be confused with “good” approximation.
The official unemployment rate is 3.6%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 7.3%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
- In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
- In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
- In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
Final Thoughts
The past several jobs reports have had wild fluctuations. This month the discrepancies strengthen.
Last month I commented: “For the last three months, jobs are up an average of 180,000 per month. Employment is up 54,000 per month.”
In February, employment was 156,949. In April, employment was 156,645. That’s a three month loss of 304,000 employees, 101,000 a month.
Last month I commented “Year-over-year employment went from 155,160 to 156,748. That’s an average of 132,000 per month and slowing, if the trend holds.”
In April, year-over-year employment rose from 155,216 to 156,645. That’s an average gain of 119,000. The trend continues.
Jobs reports in 2019 have been much weaker than the headline numbers suggest. One set of numbers is wrong.
Mike “Mish” Shedlock
Anecdotally, my company just began a major reorganization with a round of “voluntary early retirement” packages being offered. The scuttlebutt is they had more takers than anticipated, so it must have been a pretty good deal. The company is also bringing in more outside contractors to do work normally done in-house, and I’ll bet there will be a few familiar faces showing up with new “contractor” ID badges in the next few months.
Feels like the whole thing is about getting people out of the health insurance plan. Maybe when Bernie “gives” us all free health care we’ll swing the pendulum back to in-house labor again.
It
The people born between 1952 and 1957 are retiring. This is a huge demographic bulge- the post WWII and Korean War births. This will continue until about 2028 when you hit my GenX who are a smaller group.
Oof, another gut punch to Mish’s forecasting abilities.
Same number of people now working multiple, low-paying, part-time jobs, while more people drop out of the labor force entirely.
This is good news?
Consumer confidence is near the 2000 record high. A record number of people reporting that jobs are plentiful
What a bunch of Debbie Downers. Even the most pessimistic will have to concede that it is better than reporting increasing unemployment. Jeepers!
Your not too bright. Those in the labor force both employed and unemployed has been shrinking. Using the BLS method and any other method you only get what you count. Count up those dropping out of the labor force so even the U-6 number is low. Shadowstats says the unemployed rate is 20%. The actual number is probably somewhere between U-6 and shadowstats.
Let me simplify my comments so even you may understand them. The current data is better than the same sources reporting an increase in unemployment. Oh, and there was no Russian collusion, really.
Lol. No who the f@@@Kinuachdrach cares about Russian collusion or is it ‘Meddling’ as Wbz news radio reports. The media is really scratching the bottom of the barrel to find news to report on like with the whole wall issue the Chinese trade deal. The media hasn’t reported about the 25pct tarrifs which have caused retail prices of home appliances and electronics to skyrocket
You may be right. In the same sense it’s “better” for Stalin to get 103% of the votes, than only 100%.
When what is passed of as”measures,” get arbitrary enough, they really do cease to convey anything meaningful at all.
After the Fed buys and disappears securities and probably UST’s, MMT is really already here. Just dispense with the formalities already.
The Fed ha been on that bandwagon for years now. Witness the decline in listed companies, both in numbers, but even more so in share of economic activity. As for share of wealth creation, that is indeterminate, as you cannot reliably determine whether someone is growing in height, when some privileged government institution gets to arbitrarily change the length of the meter you are forced to use, entirely without any constraint at all.
More fundamentally, even if (and I have no real reason to believe most Fed “economists” aren’t genuinely trying to do their best and be as useful as they can), measuring something of no real relevance, can never take on relevance, no matter how hard you work at it.
There simply are no meaningful delineation between “in the labor force” and “out of the labor force.” Shirley Temple was in the labor force from the age of almost none. Ditto Twerkette. And Warren Buffet will remain there. That’s what being offered a good opportunity does for people. Nether is there some demand for “jobs” in the abstract. There are demand to have certain tasks done. And neither is there a supply of “jobs.” Merely people with abilities, willing to rent those out for the right price. Economically, no matter how hard you try, you cannot generate useful insight from of trying to “measure” something for which there is no demand and no supply, for. And doubly so when you also want to divide that by nonexistent, arbitrarily made up “categories” which in reality do not exist. No amount of “lets pretend we are, like, science’y like the physicists, by throwing mindless “statistical” jargon at it; will help you measure something which is not just unmeasurable, but which does indeed not even exist.
So, it’s all just arbitrary nonsense all the way down. There is no “there,” there. Noone’s necessarily trying to lie and manipulate, and even if they were, it woldn’t matter. The entire project (of empirical “economics”) has been nothing but a complete, undiffereniated dead end, since the first time some gullible was dumb and uncritical enough to give it a go.
The only reason anyone pays any attention to the utter nonsense at all, is that arbitrary rulers love arbitrary “science.” It’s a lot more convenient to be “measured” against something you can arbitrarily make up and influence, than against hard, unyielding, observable to all, reality. So now, the regime’s “scientists” can “measure” that “unemployment” in The Soviet Union is less than 1%. And that Jews lack morals, by “measuring” their cranial shapes. That is the lineage and tradition from which all of empirical “economics” stems. And that will never change, because it cannot change.
How are they paying bills then, what about health insurance. I First class coverage is employer based. ACA and government health care is on par with third world level health care
People pay with credit and debt. Like they mostly always have since the 90s. Rising wages have been eaten up by rising healthcare costs. At still the lowest rates nearly ever, the answer now more than ever is credit and debt.
Multiple jobs. Which is consistent with a reasonably robust “waiters and bartenders” economy, but completely inconsistent with what we should be seeing — vibrance in full-time employment.
The STEM sector, for instance, should be crazy hot at this point, with alleged unemployment low, yet its comatose.
It is crazy hot. The economy in Massachusetts is white hot especially in Biotech machine learning, and any type of software development. I hear of 125,000 starting salaries with $20,000 signing Bonuses
It’s the same in NYC. I am employers are getting zero takers for jobs paying anything less than $100,000. Not 600 Resumes, but not 60 but zero or 1 or 2 if lucky for a post on Indeed
How can number of payrolls increase if the total number of employed have decreased?
Beasue when Humpty Dumpty uses a word, it means just what he chooses it to mean—neither more nor less. Makes all the sense in the world. If you’ve got the brain of a small child.
None of these so called “measures” measure anything which actually exists. Nor which is meaningful. They’re no different from GDP, and the rest of the idiot canon comprising the undifferentiated nonsense passed off as “empirical economics” in that regard. It’s just arbitrary nonsense, employed for the sole purpose of attempting to justify that a bunch of childbrained, privileged nothings, is somehow justified in running around “managing” the lives of others.
The NILF number will continue to rise. Companies are barely even hiring anyone that is currently unemployed. The BLS data doesnt take into account when someone leaves one job for another. This is not a net job gain.
The chart of unemployment is entering a bottoming stage since it is well past the greatest rate of change which occurred between 2013 and 2015.
Does anyone believe anything the BLS says?
During Obama the orange guy called it fake news. Now he loves it