Mish's Global Economic Trend Analysis |
| Posted: 02 May 2014 08:09 AM PDT Initial Reaction This month sported another amazing difference between the household survey and the payroll survey. The difference is so vast that looking at the numbers in isolation, one might think the results were from two different countries. The headline number from the payroll survey beat expectations by a mile with 288,000 jobs, but beneath the surface, the household survey shows employment declined by 73,000. April BLS Jobs Statistics at a Glance
Additional Notes About the Unemployment Rate
The population rose by over 2 million, but the labor force was essentially flat. People dropping out of the work force accounts for much of the declining unemployment rate. April 2014 Employment Report Please consider the Bureau of Labor Statistics (BLS) April 2014 Employment Report. Total nonfarm payroll employment rose by 288,000, and the unemployment rate fell by 0.4 percentage point to 6.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Employment gains were widespread, led by job growth in professional and business services, retail trade, food services and drinking places, and construction. Click on Any Chart in this Report to See a Sharper Image Unemployment Rate - Seasonally Adjusted  Nonfarm Employment January 2011 - April 2014  click on chart for sharper image Nonfarm Employment Change from Previous Month by Job Type  The establishment survey gain is the largest 1-month gain since January 2012. Nonfarm employment remains just 113,000 below its January 2008 peak. Hours and Wages Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.3 hours. Average hourly earnings of private workers rose $0.03 to $20.50. Average hourly earnings of private service-providing employees rose $0.02 to $20.28. For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? Birth Death Model Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep 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 add the charts back. Table 15 BLS Alternate Measures of Unemployment  click on chart for sharper image 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 6.3%. 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 12.3%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Labor Force Factors
Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%. Synopsis Last month, weather-related effects were taken back and then some. This month we see a return to the divergence between the household survey and the establishment survey. +288,000 vs. -73,000 is massive. So is the decline in labor force of 800,000. That is the only reason the unemployment rate declined. All things considered, this was not a good report. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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