More jobs in America for April, but not as many people to work them? Odd stuff

A US jobs report came out on Friday, and it was a big one.

Total nonfarm payroll employment increased by 263,000 in April, compared with an average monthly gain of 213,000 over the prior 12 months. In April, notable jobs gains occurred in professional and business services, construction, health care, and social assistance. (See table B-1.)

Professional and business services added 76,000 jobs in April. Within the industry, employment gains occurred in administrative and support services (+53,000) and in computer systems design and related services (+14,000). Over the past 12 months, professional and business services has added 535,000 jobs.

In April, construction employment rose by 33,000, with gains in nonresidential specialty trade contractors (+22,000) and in heavy and civil engineering construction (+10,000). Construction has added 256,000 jobs over the past 12 months.

Employment in health care grew by 27,000 in April and 404,000 over the past 12 months. In April, job growth occurred in ambulatory health care services (+17,000), hospitals (+8,000), and community care facilities for the elderly (+7,000).

One downside on the jobs end of the report is that the strong manufacturing growth that we saw in 2018 has leveled off at the start of 2019. There were only 4,000 jobs added in manufacturing last month, and it followed 2 other tepid months in that sector.

Manufacturing job growth, US
Jan 2018-Apr 2018 +73,000
April-July 2018 +73,000
July-Oct 2018 +55,000
Oct 2018-Jan 2019 +64,000
Jan 2019-Apr 2019 +12,000

But overall, the jobs market seems to remain in good shape. On the unemployment side, there was another drop, which led a certain Wisconsin Congressman to spread his typically Koched-up message.

🚨 HUGE NEWS! 🚨

The US unemployment rate hits a 49-year low. Republican pro-growth policies work! #JobsReport https://t.co/inQOFlTCbB

— Sean Duffy (@RepSeanDuffy) May 3, 2019

It's interesting to me how Sean from the Real World always talks more about Trump and the US economy than the goings-on back in the 715, which aren't nearly as good.

And as usual, Duffy isn't reading the report too carefully. Because if he was, he'd realize the decline in unemployment isn't because of job growth in the household survey, but instead it is because of people leaving the labor force. In fact, over the last 6 months measured, only 63,000 more people have listed themselves as "employed". But because the labor force has gone down by 224,000 in the same time period, it means the unemployment rate has fallen from 3.8% to 3.6% since October.

And the biggest drop in the labor force was in April, with 490,000 leaving in this latest report.

It leads to an odd disparity between the payrolls and household survey, as there has been a much larger growth in jobs over the last year than the number of people reported as "employed."

Apr 2018-Apr 2019
Jobs +2.620 million
Employed +1.429 million

It's not unusual that there are large month-to-month disparities in these two surveys, but it's not normal to see a difference of nearly 1.2 million over a 12-month period, which makes me wonder which measure is a more accurate reflection of the job market.

The other unusual item is that despite unemployment dropping to a near 50-year low, wages sure aren't rising like it.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.77. Over the year, average hourly earnings have increased by 3.2 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $23.31 in April.

And that followed a similarly-mediocre 5-cent-an-hour increase in March, which makes for the lowest 2-month combined increase in average hourly wages in more than a year. Logic tells you wage growth should be accelerating when we are at historically low unemployment, but we're at the same 3.2% year-over-year increase we had back in August.

But the US job market is undoubtably in a pretty good spot through the first 1/3 of 2019, with not many signs of hiring slowing down. I just wonder how much further it can go, given the stagnation of the labor force leading to an even lower unemployment rate, but a lid staying on wage growth.

I have no way to deny the very good jobs numbers, but it also makes me look around and ask "This is as good as it's going to get? Really?"