April Downer: Labor Force Participation and Number of Employed People Fall; Unemployment Rate Holds at 3.6%

(CNSNews.com) – Non-farm payrolls added 428,000 jobs in April, in line with the the consensus estimate of around 400,000, the Labor Department’s Bureau of Labor Statistics reported on Friday.

The number of employed people fell to 158,105,000, a decrease of 353,000 from the prior month. But the number of unemployed people — those who have actively looked for work in the prior four weeks and are currently available for work — also dropped by 11,000 to 5,941,000.

The April unemployment rate held steady at 3.6 percent, the same low rate as it was in March. But the labor force participation rate is moving in the wrong direction.

In April, the civilian non-institutional population in the United States was 263,559,000. That included all people 16 and older who did not live in an institution, such as a prison, nursing home or long-term care facility.

Of that civilian non-institutional population, 164,046,000 were participating in the labor force, meaning they were either employed or unemployed — they either had a job or were actively seeking one during the last month. This resulted in a labor force participation rate of 62.2 percent in April, down from 62.4 percent in March.

The participation rate was 61.4 percent when Joe Biden took office. Today’s number, 62.2 percent, is still below the Trump-era high of 63.4 percent in February 2020, just before COVID shut things down.

The number of Americans counted as not in the labor force — they had no job and were not looking — now totals 99,513,000, or 478,000 more than it was last month.

This not-in-the-labor-force group has continued to grow over time, boosted by the growing number of Baby Boom retirees. But the number continues to drift down from the all-time pandemic high of 103,538,000 in April 2020, when millions of Americans dropped out of the labor force.

Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.2 percent), teenagers (10.2 percent), Whites (3.2 percent), Blacks (5.9 percent), Asians (3.1 percent), and Hispanics (4.1 percent) showed little or no change over the month.

In April, 7.7 percent of employed persons teleworked because of the coronavirus pandemic, down from 10.0 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

Employment in leisure and hospitality increased by 78,000 in April. Job growth continued in food services and drinking places (+44,000) and accommodation (+22,000). But employment in leisure and hospitality is down by 1.4 million, or 8.5 percent, since February 2020.

Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $31.85 in April. Over the past 12 months, average hourly earnings have increased by 5.5 percent.

The change in total nonfarm payroll employment for February was revised down by 36,000, from +750,000 to +714,000, and the change for March was revised down by 3,000, from +431,000 to +428,000. With these revisions, employment in February and March combined is 39,000 lower than previously reported.

As Federal Reserve Chairman Jerome Powell said earlier this week, the labor market is “unbalanced” because there aren’t enough willing workers to fill the available jobs. BLS reports the number of job openings reached a record high of 11.5 million on the last business day of March.

Fed Chairman: Demand for workers outstrips supply

“The labor market has continued to strengthen and is extremely tight,” Federal Reserve Chairman Jerome Powell told a news conference on Wednesday.

“Labor demand is very strong, and while labor force participation has increased somewhat, labor supply remains subdued. Employers are having difficulties filling job openings, Powell said, noting that there are almost 2 job vacancies for every one unemployed person.

“There’s a labor shortage,” Powell said. “There aren’t enough people to fill these job openings and companies can’t hire. And — and — and wages are moving up at — at levels that would not over time be consistent with 2 percent inflation over time.

“And of course, everyone loves to see wages go up, and it’s a great thing, but you want them to go up at a sustainable level, because these wages are, to some extent, being eaten up by inflation.

“So, what that really means is, to get the kind of labor market we really want to get — we really want to have a labor market that serves all Americans, especially the people in the lower income part of the distribution, especially them. To do that, you’ve got to have price stability (lower inflation). And we’ve got to get back to price stability so that we can have a labor market where people’s wages aren’t being eaten up by inflation and where we can have a long expansion, too.”

Powell said he expects job creation to slow, now that the Fed has raised interest rates and plans to take other steps to combat inflation: “Job creation has been at, you know, more than a half a million per month in recent months; very, very strong, particularly for this stage of the economy. And so we think with — with fiscal policy less supportive, with monetary policy less supportive, we think that job creation will slow as well.”

Powell said the goal is to bring the supply of labor and the demand for labor back into balance:

“So we think through our policies, through further healing in the labor market, higher rates, for example, of vacancy-filling and things like that, and more people coming back in, we like to think that supply and demand will come back into balance and that, therefore, wage inflation will moderate to still high levels of wage increases, but ones that are more consistent with 2 percent inflation. That’s — that’s our expectation.”

Powell said it’s a “good time to be a worker” who’s looking to either change jobs or get a pay raise in their current job: “So it’s a strong economy, and — and nothing about it suggests that it’s — that it’s close to or vulnerable to a recession. Now, of course, given events around the world and fading fiscal policy effects and — and higher rates, you — you could see some slower economic activity.”

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