U.S. jobless rate at 3.6%, falls to lowest level since 1969

The U.S. labor market saw a strong uptick of 263,000 jobs in April as the nation’s jobless rate fell 0.2 percentage points between months, the lowest level since December 1969, according to the monthly employment picture released Friday (April 6) by the U.S. Bureau of Labor Statistics (BLS).

The April job add-ons are well above the consensus of Wall Street economists who forecasted a total of a new 180,000 jobs attached to the nation’s economy last month.

April’s employment picture also follows ups last week’s snapshot of U.S. real Gross Domestic Product (GDP), which showed that the U.S. economy expanded at a brisk 3.2% in the first quarter, based on the “advance’ reading by U.S. Bureau of Economic Analysis (BEA). Gad Levanon, chief economist with The Conference Board, said the 263,000 new jobs added to U.S. payrolls makes it difficult to argue for an employment slowdown.

The so-called “U-6” jobless rate, which includes those “marginally” attached to the labor force and persons employed part-time but seeking full-time work, was at 7.5%, down from 7.7% in March and well below year ago levels at 8.8%. Some economists point to the U-6 number as a better and broader measure of the economy with respect to jobs.

‘LABOR MARKET SQUEEZE’
“In the past month, most economic releases came out better than expected, suggesting that the U.S. economy will continue to grow above its long-term two percent trend through at least the end of the year with low near-term recession risks,” said Levanon. “Today’s employment growth strengthens this point of view. The strong recovery in temporary-help employment, one of the best leading indicators of the labor market, further reduces the risk of an employment slowdown.”

The Conference Board economist said it is not surprising that the labor market continues to tighten, given the economic environment and stagnation in working-age population growth.

“Labor markets will continue tightening in coming months and wages are likely to accelerate further,” he said. “The recovery in the U.S. economy and the ongoing labor market squeeze are likely to further shift the Federal Reserve away from considering a rate cut in 2019.”

The monthly jobs snapshot from the U.S. Labor Department’s statistic research arm closely mirrors the highly-watched ADP National Employment Report, which shows that private sector employment across the nation spiked by 275,00 jobs from March to April.

“The job market is holding firm, as businesses work hard to fill open positions. The economic soft patch at the start of the year has not materially impacted hiring,” said Mark Zandi, chief economist of Moody’s Analytics. “April’s job gains overstate the economy’s strength, but they make the case that expansion continues on.”

The U.S. employment rate is now below Arkansas’ jobless rate, which fell 0.1 percentage points to 3.7% in March. Still, Arkansas’ jobless rate has remained below 4% for 33 consecutive months now, falling to a historic low of 3.4% in the summer of 2017.

JOB SEGMENT CHANGES
Of the 263,000 jobs added to the nation’s labor pool, there were notable job gains in professional and business services, construction, health care, and social assistance. Over the month, the number of unemployed persons decreased by 387,000 to 5.8 million.

Professional and business services added 76,000 jobs in April as gains occurred in administrative and support services and in computer systems design and related services. For the past 12 months, the supersector has added 535,000 jobs.

Construction employment rose by 33,000 with gains in non-residential specialty trade contractors and in heavy and civil engineering. This blue-collar sector added 256,000 jobs over the past 12 months, although some employers have struggled with hiring qualified workers.

Employment in health care grew by 27,000 in April and 404,000 over the past 12 months. Most of the job growth occurred in ambulatory health care services, hospitals and community care facilities for the elderly. Social assistance added 26,000 jobs over the month, with all the gain in individual and family services.

Financial activities employment continued to trend up in April with 12,000 jobs. The industry has added 110,000 new positions over the past 12 months with key growth in real estate and rental and leasing.  Manufacturing employment changed little for the third month in a row with only 4,000 new positions. In the 12 months prior to February, the industry had added an average of 22,000 jobs per month.

Employment in the struggling retail trade saw a loss of 12,000 jobs most at general merchandise stores hurt by increasing online sales. Those positions were partly offset by 8,000 new jobs at motor vehicle and parts dealers.

DEMOGRAPHIC DATA
Among the major worker groups, unemployment rates declined in April for adult men and women at 3.4% and 3.1%, respectively, while Asians and Hispanics fell to 2.2% and 4.2% each. The jobless rates for Blacks at 6.7% and teenagers at 13% showed little or no change.

Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 186,000 over the month to 2.7 million. In April, those unemployed less than 5 weeks declined by 222,000 to 1.9 million. The number of long-term unemployed, those out of work for 27 weeks or more, was little changed at 1.2 million, accounting for more than one-fifth of those not working.

The labor force participation rate declined by 0.2 percentage points to 62.8% in April but was unchanged from a year earlier. The employment-population ratio was unchanged at 60.6% for the month and has been either 60.6% or 60.7% since October 2018.

The number of persons employed part time for economic reasons was essentially little changed at 4.7 million in April. These individuals, who would have preferred full-time employment, were working part-time because their hours had been cut back or because they were unable to find a full-time job.

There were 1.4 million persons marginally attached to the labor force for the month, hardly changed from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.

Among the marginally attached in April, there were 454,000 discouraged workers, or those persons not looking for work because they believe no jobs are available for them. The remaining 963,000 persons marginally attached to the labor force had not searched for work for reasons such as school attendance or family responsibilities.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by six cents to $27.77. Over the year, average hourly earnings have increased by 3.2% The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.4 hours in April. In manufacturing, both the workweek and overtime were unchanged at 40.7 hours and 3.4 hours, respectively.

The change in total nonfarm payroll employment for February was revised up from 33,000 to 56,000, but March was revised down from 196,000 to 189,000. With these combined revisions, there were 16,000 more jobs in the past two months than previously reported.