Friday, May 6, 2016

In April, Employment Figures Take a Breather, But American Job Shortage Number (AJSN) Shows We’re Still 17.3 Million Positions Behind

Lukewarm.  That’s how this morning’s Bureau of Labor Statistics April employment numbers felt, headed by an unchanged 5.0% official jobless rate.   

We gained 160,000 net new nonfarm positions, below some economists’ 200,000 projections, but still more than our population gain absorbed.  The count of those officially unemployed for 27 weeks or longer fell 100,000 to 2.1 million, and those working part-time for economic reasons, or unsuccessfully seeking to improve their shorter-hours positions to full-time ones, diminished a similar amount to 6.0 million.  Average wages were 10 cents per hour higher than in March, a fine result with annual inflation under 2%, and are now at $25.53.  Unadjusted unemployment fell from 5.1% to 4.7%, mostly on the seasonal difference between March and April.    

On the down side, the two best measures of how common it actually is for Americans to be working, the employment-population ratio and the labor force participation rate, gave up their past two months’ improvements to drop 0.2% apiece to 59.7% and 62.8%.  The number of people in almost all marginally attached categories rose as well, from a 148,000 gain in those wanting to work but not looking for it for a year or more, to increases in those feeling the same but stopped by family responsibilities, being in school or training, having ill health or disability, and being temporarily unavailable to work.  The count of people claiming no interest whatever in employment gained 342,000 to 88.8 million, significant as better prospects for working cause their number to fall.  

The American Job Shortage Number or AJSN, which shows how many more positions could be quickly filled if getting one were easy and routine, dropped almost half a million, as follows:

Compared with a year earlier the AJSN has fallen 530,000, almost completely due to official unemployment down from April 2015’s 7,966,000.  The year-over-year improvements, which were consistently 1 million-plus between 2014 and 2015, are getting smaller, showing that latent demand for work, as well as official joblessness, may be finding a floor.

Should we be happy with or concerned about April’s data?  A little of both.  There was no real chance March’s superb results would set a new pace, so a neutral sort of month is, as such, no problem.  We need to keep an eye, though, on the labor force participation rate and the employment-population ratio – if they drop again next month, that will mean times are getting worse, even if, for example, the unemployment rate falls.  We’ll see, and so will the turtle, who stayed where he was. 

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