April jobs report: 165K jobs created, 7.5% unemployment rate; Update: Reuters: “Consistent with a slowdown”

posted at 8:34 am on May 3, 2013 by Ed Morrissey

The April jobs report from the Bureau of Labor Statistics beat expectations, with job growth at 165,000 net, and an unemployment rate of 7.5%.  The BLS also upwardly revised the previous two months — adding 64,000 to February to bring it to 332K jobs added, and 50,000 to March to raise it to 138K:

Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, food services and drinking places, retail trade, and health care.

The unemployment rate, at 7.5 percent, changed little in April but has declined by 0.4 percentage point since January. The number of unemployed persons, at 11.7 million, was also little changed over the month; however,
unemployment has decreased by 673,000 since January. …

The change in total nonfarm payroll employment for February was revised from +268,000 to +332,000, and the change for March was revised from +88,000 to +138,000. With these revisions, employment gains in February and March combined were 114,000 higher than previously reported.

The civilian workforce participation rate remained at a 34-year low of 63.3%. However, the number of people not in the workforce declined slightly in the Household data from March by 31,000. It’s still 632,000 higher than in February. Discouraged workers rose by 32,000 and marginally-attached workers rose by 21,000, both of which are relatively narrow shifts.

The drop in the U-3 or nominal unemployment rate to 7.5% is one tenth of a point from March, but four-tenths from January. The U-6 total unemployed rate actually rose a tenth of a point in April to 13.9%, but that’s also a half-percent lower than January.

The 165K jobs growth figure beat expectations across the board — but let’s not turn that into better news than it is.  At 165K, the US economy generated slightly more jobs than it needs to keep up with population growth (~150K).  The civilian workforce participation rate makes it clear that we’re not putting people back to work — at best, we’re treading water.  The revised February numbers are what we need as an average to make a dent in the massive number of people shut out of the jobs market.  This is about the average we’ve seen for the recovery.

CNBC seems pleased by the results, but points out the workforce woes:

Job creation accelerated in April, with the U.S. economy adding 165,000 new positions and the unemployment rate edging lower, quelling worries of a spring slowdown.

New figures from the Bureau of Labor Statistics indicated that a light March payrolls report may have been an aberration, as higher taxes and reduced spending due to the fiscal stalemate in Washington failed to deter growth.

The unemployment rate edged lower to 7.5 percent, due partly to the jobs gains and to a labor-force participation rate that remains at a 35-year low.

Reuters, however, takes a more pessimistic view:

Still, details of the report remained consistent with a slowdown in economic activity. Construction employment fell for the first time since May, while manufacturing payrolls were flat. The average workweek pulled off a nine-month high, but average hourly earnings rose four cents[.]

Beating expectations is not the same as a good jobs report.  This one is a treading-water report, nothing more, and the revisions to March only move it up from poor to stagnation.

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Comment pages: 1 2

Wow. 7.5% unemployment and workforce participation rate at a 34-year low of 63.3%?
 

Same “non Republican” who crawled over broken glass to vote for Romney in NYC of all places. Same “independent” who is yet ti make one single positive post of Obama. Why are you lying to yourself? You are a hyper partisan republican hack and you know it.
 
HotAirLib on May 1, 2013 at 1:07 PM

 
It’s neat how that works in reverse, too.

rogerb on May 3, 2013 at 12:26 PM

9.5 million people have dropped out of the workforce during Obama’s presidency.

Own it, Mr. President.

Stolen from a post on my fb wall.

22044 on May 3, 2013 at 12:28 PM

Beating expectations is not the same as a good jobs report. This one is a treading-water report, nothing more, and the revisions to March only move it up from poor to stagnation.

It seems to me that in the Obama economy jobs and the economy overall seem to heat up slightly during the first quarter and then stagnate in the second quarter, followed by a notable decline in the third quarter. So maybe this is just true to form for Obamanomics.

JonPrichard on May 3, 2013 at 12:34 PM

Woo! Fiona! We missed you so! How did that job as Benghazi Ethics Advisor go?

apostic on May 3, 2013 at 12:39 PM

A strong economy is one of those old ideas wingnuttts!

Now prostrate yourself before Obama Bat Face.

tom daschle concerned on May 3, 2013 at 12:52 PM

Beating expectations is not the same as a good jobs report. This one is a treading-water report, nothing more, and the revisions to March only move it up from poor to stagnation.

Another reason why Wall Street was almost universally opposed to the sequester. To cut spending during a recovery is almost unprecedented, and the projected 1/2 % cut in GDP it triggered had an unusually depressive impact on job creation. At a 2% GDP growth rate, job creation is muted.
Spending cuts are necessary but should be phased in over time.

bayam on May 3, 2013 at 1:01 PM

Ha. Thanks, bayam. I’d forgotten about that one:
 

From a historical perspective, attempts to balance the budget don’t turn out so well when you’re still on the precipice of a recovery.
 
bayam on April 5, 2013 at 1:43 PM

 
“Precipice”. Nicely done. That was one of the funniest posts ever made on this site.

rogerb on May 3, 2013 at 1:10 PM

Another reason why Wall Street was almost universally opposed to the sequester. To cut spending during a recovery is almost unprecedented, and the projected 1/2 % cut in GDP it triggered had an unusually depressive impact on job creation. At a 2% GDP growth rate, job creation is muted.
Spending cuts are necessary but should be phased in over time.

bayam on May 3, 2013 at 1:01 PM

Cutting GOVERNMENT spending during a recovery results in more money for the private sector to spend, resulting in a TRUE and sustainable recovery.

One cannot heal a wound by bleeding it out.

Tenwheeler on May 3, 2013 at 1:12 PM

The 16 – 24 year olds can’t get jobs because the 25-35 year olds are taking them. These kids won’t have any work experience at all.

Thanks Obama!

portlandon on May 3, 2013 at 9:01 AM

Actually, Grandpa is taking the jobs away from both the 16-24 and 25-34 (the break is at x4 and x9) year olds, and the 16-24 year olds are taking them away from their older siblings. Using seasonally-unadjusted numbers for April (because the subgroups of the elderly are not available in seasonally-adjusted flavor):

- The 16-24 age group had a labor force participation rate of 53.3% (0.3 percentage points off their modern-era April low, set last year, and outside the Obama era, the worst April since 1965) and an employment-population ratio of 45.3% (outside of the past 3 Aprils, the worst April since records started in 1948).

- The 25-34 age group had a labor force participation rate of 81.1% (the worst April since 1983, notably before women fully entered the workforce) and an employment-population ratio of 75.2% (while the best April of the Obama era, it was worse than any April between 1984 and 2008).

- The 65-and-older age group had a labor force participation rate of 19.0% (highest April since 1962) and an employment-population ratio of 18.0% (highest April since 1964).

The other age groups below the age of 55 have a similar trend to the 25-34 age group, while the 55-64 age group, while off their late-2000s record employment, are still near that record.

Steve Eggleston on May 3, 2013 at 1:18 PM

Another reason why Wall Street was almost universally opposed to the sequester. To cut spending during a recovery is almost unprecedented, and the projected 1/2 % cut in GDP it triggered had an unusually depressive impact on job creation. At a 2% GDP growth rate, job creation is muted.
Spending cuts are necessary but should be phased in over time.

bayam on May 3, 2013 at 1:01 PM

Cutting GOVERNMENT spending during a recovery results in more money for the private sector to spend, resulting in a TRUE and sustainable recovery.

One cannot heal a wound by bleeding it out.

Tenwheeler on May 3, 2013 at 1:12 PM

That’s absolutely untrue, not in the short run. If government spending cuts led to a surplus that could be returned to the economy via tax cuts, you would be correct. It’s not the case this time around.

bayam on May 3, 2013 at 1:22 PM

The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)

From Mr. Denninger:

This is a problem. If we look at the “employed” figure of 143,724,000 people a drop of 0.2 hours is a full-time-equivalent decrease of 1/2%. Applied to the employed population this amounts to an imputed economic decrease of 718,620 jobs!

That is, the loss of work-week hours of just 0.2 is the same economic impact as firing 700,000 people!

tom daschle concerned on May 3, 2013 at 1:24 PM

That’s absolutely untrue, not in the short run. If government spending cuts led to a surplus that could be returned to the economy via tax cuts, you would be correct. It’s not the case this time around.

bayam on May 3, 2013 at 1:22 PM

Instead Obama is raising taxes so the government can spend. Not very sound, but when your goal isn’t boosting the economy it makes sense.

darwin on May 3, 2013 at 1:28 PM

Another reason why Wall Street was almost universally opposed to the sequester.

bayam on May 3, 2013 at 1:01 PM

I love how you make things up from thin air.

the projected 1/2 % cut in GDP it triggered had an unusually depressive impact on job creation.

I love how you make things up from thin air.

blink on May 3, 2013 at 1:30 PM

Based on the model applied, the sequester was forecasted to reduce GDP by .5% or more, as cited in more detail:
http://www.businessinsider.com/us-gdp-impact-of-cuts-in-full-sequester-2013-1

No one should be surprised that, in fact, the economy isn’t growing faster. On the other hand, action on the DOW suggests that the stock market is forecasting a strong recovery (or it’s entered another bubble).

bayam on May 3, 2013 at 1:37 PM

That’s absolutely untrue, not in the short run. If government spending cuts led to a surplus that could be returned to the economy via tax cuts, you would be correct. It’s not the case this time around.

bayam on May 3, 2013 at 1:22 PM

taking the Mental Retardation angle, are you??

Never saw that coming…s/c

ToddPA on May 3, 2013 at 2:04 PM

bayam on May 3, 2013 at 1:37 PM

Did anybody tell you that the only place where one can be wrong more often than weather forecasting and still keep one’s job is economic forecasting? What was the unemployment rate supposed to top out at with Porkulus, and what was it supposed to be now with Porkulus?

Steve Eggleston on May 3, 2013 at 2:08 PM

tom daschle concerned on May 3, 2013 at 1:24 PM

I think Denninger screwed up the math some here. Instead of using the CPS total employment (or even the CPS private-sector employment), he should have used the CES private-sector jobs as the base as the average hours worked (in the private sector) is from the CES and thus is a function of the number of jobs. Further, it appears he neglected to take the change between March and April into account.

With that said, the FTE in the private sector dropped by 416,000 to 97,722,000. Though the average hours worked is a new stat (it began to be tracked in March 2006) and thus there isn’t a lot of history to go on, I can tell you that April’s number is worse than any month between March 2006 and September 2008, and that it was just the third April (out of 8) that it declined from March. It is, however, not too far off the record high of 100,152 in March 2008, well off the low of 90,494 in October 2009, and significantly above the 94,946 Teh SCOAMT “inherited”.

Steve Eggleston on May 3, 2013 at 2:21 PM

Steve Eggleston on May 3, 2013 at 2:08 PM

Of course, I assumed that bayam isn’t being paid by OFA or one of its cousins. Professional liberal commenters are paid to be wrong 99% of the time.

Steve Eggleston on May 3, 2013 at 2:22 PM

It’s not the case this time around.
 
bayam on May 3, 2013 at 1:22 PM

 
Ha. It’s extra super special this time.

rogerb on May 3, 2013 at 2:25 PM

I think Denninger screwed up the math some here. Instead of using the CPS total employment (or even the CPS private-sector employment), he should have used the CES private-sector jobs as the base as the average hours worked (in the private sector) is from the CES and thus is a function of the number of jobs. Further, it appears he neglected to take the change between March and April into account.

With that said, the FTE in the private sector dropped by 416,000 to 97,722,000. Though the average hours worked is a new stat (it began to be tracked in March 2006) and thus there isn’t a lot of history to go on, I can tell you that April’s number is worse than any month between March 2006 and September 2008, and that it was just the third April (out of 8) that it declined from March. It is, however, not too far off the record high of 100,152 in March 2008, well off the low of 90,494 in October 2009, and significantly above the 94,946 Teh SCOAMT “inherited”.

Steve Eggleston on May 3, 2013 at 2:21 PM

I’ve never really dug too deep into these reports before, but Denninger quotes the BLS report, and the specific quote I copied states the data came from tables B-2 and B-7. In the Technical Notes section of the BLS report you find the following:

The establishment survey provides information on
employment, hours, and earnings of employees on nonfarm
payrolls; the data appear in the “B” tables, marked
ESTABLISHMENT DATA. BLS collects these data each
month from the payroll records of a sample of
nonagricultural business establishments. Each month the
CES program
surveys about 145,000 businesses and
government agencies, representing approximately 557,000
individual worksites, in order to provide detailed industry
data on employment, hours, and earnings of workers on
nonfarm payrolls.

Would it be correct to conclude that Denninger did comment on data coming from the CES program?

tom daschle concerned on May 3, 2013 at 2:32 PM

Total hours & total wages dropped from March to April, it’s been confirmed.

22044 on May 3, 2013 at 3:03 PM

Would it be correct to conclude that Denninger did comment on data coming from the CES program?

tom daschle concerned on May 3, 2013 at 2:32 PM

He combined data from both the CES and CPS; the 143,724,000 comes from the CPS (specifically the not-seasonally-adjusted side of the table). To put it shortly, he was sloppy with the numbers, but the basic conclusion is right.

There also is the matter of rounding errors, and they can be significant. Given the hours-worked average is rounded to the nearest tenth, and both 34.6 and 34.4 are rounded, the 0.2 rounded difference can be anywhere between 0.1000…1 and 0.29999…. In this case, it doesn’t remove the negative sign from my calculated -416,000 FTEs for April, but it does mean it could be anywhere from (approximately) -132,000 to (approximately) -700,000.

Steve Eggleston on May 3, 2013 at 3:06 PM

Just heard that massive layoffs (around 30% average overall from each office) are coming next week at my company…

hollygolightly on May 3, 2013 at 3:07 PM

Statistical lesson of the day – when one can help it, don’t compare unlike numbers.

Steve Eggleston on May 3, 2013 at 3:09 PM

Another reason why Wall Street was almost universally opposed to the sequester.

bayam on May 3, 2013 at 1:01 PM

It was Obama’s idea. Say do you ever get his balls stuck in your throat?

CW on May 3, 2013 at 6:17 PM

I stopped giving a flying frack about the unemployment rate on about November 7 of last year.

If a majority of this country is too stupid to care that unemployment is at least 7.5%–if not close to twice that once one factors in those who are no longer collecting unemployment or looking for work–then why the hell should I care?

MidniteRambler on May 3, 2013 at 7:17 PM

As usual, on various news sites the ‘tards are posting comments about how Republicans hate good economic news, that The One’s economic policies (whatever those are—shades of Clintoon) are clearly working, and how great Wall Street (which of course they hate) is doing so well.

Someone pointed out massive spring hiring that we see every year from lawn and garden operations and that most of them will be laid off by Christmas.

Dr. ZhivBlago on May 4, 2013 at 1:01 PM

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