April Employment Report

The BLS’s employment report for April is pretty good:

Employment rose in April, and the unemployment rate was unchanged at 5.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment increased by 274,000 over the month. Job growth was widespread, with gains in construction, mining, and several service-providing industries.

We’ve now seen positive net job creation for almost two years, with sporadic months (like this month) that have yielded enough job growth to actually start slowly increasing the employment-population ratio:

This month’s report is encouraging… though as always, I will add the caveat here that it takes a few months (of monthly data) to really differentiate a trend from a temporary blip in the data. As the graph above makes clear, we also have quite a way to go to match the labor market performance of the mid 1990s (to say nothing of the booming late 1990s).

One last note: one of the bright spots in the labor market continues to be construction. Of the roughly 3 million net jobs created since early 2003, half a million have been in the construction industry. As a result, the percent of American workers employed by the construction industry has been rising in recent years:

This is good in some ways (half a million more jobs is of course better than their absence), but bad in others. Construction jobs are by nature quite temporary, and employment in construction can therefore fall as quickly as it can rise. Something to look out for, if and when long-term interest rates start to go up…