Saturday, May 8, 2021

April jobs reports falls far short of expectations. But nothing to worry about yet

Friday morning, many of us tuned into the financial news to find out just how huge April's US job report was going to be, in light of increased COVID vaccinations and falling unemployment claims. And what we got was....not much growth at all.

Uhhh, what? Let's look at the actual jobs report and see what's going on, because there was little indication that we'd see a slowdown like that.

It turns out there really wasn't much of a slowdown in new jobs in total. But because the Bureau of Labor Statistics counts on a large increase in jobs happening anyway because it's April and weather is warming, it seems like there's a huge decline.

Change in jobs, March and April 2021
Not seasonally adjusted
March +1,176,000
April +1,089,000

Seasonally adjusted
March +770,000
April +266,000

April also seemed to be in the midst of a jobs shift. Some areas that had seen sizable recent growth suffered losses last month.
Within professional and business services, employment in temporary help servicesdeclined by 111,000 in April and is 296,000 lower than in February 2020. Business support services lost jobs in April (-15,000), while architectural and engineering services and scientific research and development services added jobs (+12,000 and +7,000, respectively).

Within transportation and warehousing, employment in couriers and messengers fell by 77,000 in April but is up by 126,000 since February 2020. Air transportation added 7,000 jobs over the month.

Manufacturing employment edged down in April (-18,000), following gains in the previous 2 months (+54,000 in March and +35,000 in February). In April, job losses in motor vehicles and parts (-27,000) and in wood products (-7,000) more than offset job gains in miscellaneous durable goods manufacturing (+13,000) and chemicals (+4,000). Employment in manufacturing is 515,000 lower than in February 2020.
We also saw retail trade decline by a seasonally-adjusted 15,300 jobs, and grocery stores in particular had a big giveback of the job gains that had happened during the COVID era.

What's especially odd about the report is that some sectors had strong job growth that reflected progress in vaccinations and warmer weather allowing more people to want to go out more. The accomodation (+54,400) and entertainment (+89,600) industries both had big hiring in April, as did bars and restaurants (+187,000).

But we also see that these industries still employ many fewer people than they did before COVID became a thing, and sales in those industries are still notably below what they were at the end of 2019. Which means that stimulus-bill subsidies for as well as live entertainment venues are going to be needed to fill the slack that still exists for those businesses.

While the payrolls numbers were the ones that most concentrated on, the increase in unemployment and related numbers from the household survey also needs to be looked at. Unemployment surprisingly rose, but much of it was for the "good reason" - more people entering the work force.

April 2021 jobs report
Change in Labor Force +430,000
Change in Employed +328,000
Change in Unemployed +102,000

On a related note, the number of employed people working reduced hours went down by quite a bit.

Workers who part-time for economic reasons
March 2021 5,826,000
April 2021 5,243,000 (-583,000)

So while righties and mediocre business owners have been trying to blame the $300/week add-on in unemployment benefits as a reason that they can't find workers, because people don't want to enter the work force, the data in the jobs report doesn't back that up at all.

Washington Post economics writer Heather Long latched onto another part of the household survey, which had this stunning stat.

By comparison, men did OK in finding work in April, with 336,000 more of them saying they were employed last month.

Lastly, I want to step back and look at the big picture. While good progress has been made in getting the economy back toward normality, we aren't there yet and in some sectors, we aren't close. Even as the cloud of COVID starts to fade over our society, it's not entirely gone, and we are still more than 8 million jobs below where we were before the pandemic broke out.

And we don't restore all those jobs by trying to push people back into poverty-wage work by cutting off their unemployment benefits. But you can bet that's another Big Lie that GOP states are going to try to throw out in the coming weeks, to deflect from the fact that their paymasters won't offer enough to entice people to want to work tough jobs that have high-exposure to COVID. And many people ARE going back to work, but we need to offer more supports through measures such as child care and a higher minimum wage to decrease barriers for others.

I need more than one month of add, seasonally-deflated data to see if things truly are slowing down in America. So while yesterday's jobs report got my attention, and is worth digging into, I'm not going to panic, particularly given that new unemployment claims have fallen bigtime in the weeks since the employment survey took place. But it also means we can't assume that things are clicking on all cylinders, and that there shouldn't be active investments made by government to get us back toward full strength.

No comments:

Post a Comment