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Further considerations on the disappointing April jobs report. Consider the averages!

Further considerations on the disappointing April jobs report. Consider the averages!

I’ve been threatening for a couple of weeks to run some extended comments on the big miss in the April jobs report. As there’s no economic news of note today, here goes . . . .


1. It’s possible March was the outlier rather than April.


The original report for March was that 916,000 jobs were added. In this month’s report it was revised down to 770,000. Below is a graph of “civilian employment” from the household report (blue), “employment” from the establishment report (which is the commonly reported number (red), and the monthly change in initial jobless claims (green, inverted so that a decline shows as a positive, /100 for scale):


Note that in general – but not always! – the change in jobless claims correlates well with the change in both of the jobs numbers. Note also that the April change in jobless claims was the largest since early on in the pandemic. 

April jobs report: well, that was a big miss …. but look at the composition

April jobs report: well, that was a big miss …. but look at the composition

HEADLINES:

  • +266,000 million jobs added: 218,000 private sector plus 48,000 government. The alternate, and more volatile measure in the household report indicated a gain of 328,000 jobs, which factors into the unemployment and underemployment rates below.
  • U3 unemployment rate rose 0.1% to 6.1%, compared with the January 2020 low of 3.5%.
  • U6 underemployment rate declined 0.3% to 10.4%, compared with the January 2020 low of 6.9%.
  • Those on temporary layoff increased 88,000 to 2,114,000.
  • Permanent job losers increased 97,000 to 3,529,000.
  • February was revised upward by 68,000, while March was revised downward by 146,000, for a net loss of 78,000 jobs compared with previous reports.

Leading employment indicators of a slowdown or recessionI am still highlighting these because of their leading nature for the economy overall.  These were almost uniformly negative, their worst performance in a year: