Job Growth Beats Expectations by Adding 165,000 Jobs; Unemployment Falls to 7.5%

Finally some good news out of Washington, D.C. Although the consensus amongst economists was that we were due for a poor monthly job report, the numbers released today by the U.S. Bureau of Labor Statistics were actually decent. Not great, but definitely not poor as those of us who watch these numbers were expecting.

The U.S. economy added 165,000 jobs in April 2013. That beat by some 17,000 the consensus 148,000 gain expected by economists. Even better, the economy added 114,000 more jobs in February and March than had previously been reported. It isn’t unusual for the Bureau to revise up or down the estimates for the previous months but it is always nice when those revisions are higher than lower. With the revisions, job growth in the first quarter totaled 618,000. That’s just slightly behind the 208,000 monthly average during all of last year.

Interestingly, once again the austerity measures in place at the federal and especially state and local government units held back job growth. Private companies added 176,000 jobs, which means that the government shed 11,000 jobs. Given that the percentage of workers employed by federal, state, and local government units is 7.84 percent, the percentage of workers employed by private businesses is 92.16 percent. If the government were creating jobs at the same rate as private industry, the government would have added 14,972 jobs in April and that would have made the April job gains a very healthy 190,972.

The unemployment rate, obtained by a separate survey of U.S. households, fell one-tenth of a percentage point to 7.5 percent. Unlike previous months when the unemployment rate fell due to people dropping out of the labor market by no longer looking for work, in April the percentage decreased as more people found work. That was the lowest rate unemployment rate since December 2008. Economists expected the unemployment rate to hold steady at 7.6 percent.

Household Survey Data

The unemployment rate, at 7.5 percent, changed little in April but has declined by 0.4 percentage point since January. The number of unemployed persons, at 11.7 million, was also little changed over the month; however, unemployment has decreased by 673,000 since January.

Among the major worker groups, the unemployment rate for adult women (6.7 percent) declined in April, while the rates for adult men (7.1 percent), teenagers (24.1 percent), whites (6.7 percent), blacks (13.2 percent), and Hispanics (9.0 percent) showed little or no change. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier.

In April, the number of long-term unemployed (those jobless for 27 weeks or more) declined by 258,000 to 4.4 million; their share of the unemployed declined by 2.2 percentage points to 37.4 percent. Over the past 12 months, the number of long-term unemployed has decreased by 687,000, and their share has declined by 3.1 percentage points.

The civilian labor force participation rate was 63.3 percent in April, unchanged over the month but down from 63.6 percent in January. The employment-population ratio, 58.6 percent, was about unchanged over the month and has shown little movement, on net, over the past year.

In April, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 278,000 to 7.9 million, largely offsetting a decrease in March. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In April, 2.3 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 835,000 discouraged workers in April, down by 133,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in April had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment increased by 165,000 in April, with job gains in professional and business services, food services and drinking places, retail trade, and health care. Over the prior 12 months, employment growth averaged 169,000 per month.

Professional and business services added 73,000 jobs in April and has added 587,000 jobs over the past year. In April, employment rose in temporary help services (+31,000), professional and technical services (+23,000), and management of companies (+7,000).

Within leisure and hospitality, employment in food services and drinking places rose by 38,000 over the month. Job growth in the food services industry averaged 25,000 per month over the prior 12 months.

Retail trade employment increased by 29,000 in April. The industry added an average of 21,000 jobs per month over the prior 12 months. In April, job growth occurred in general merchandise stores (+15,000) and in health and personal care stores (+5,000).

Health care added 19,000 jobs in April. Within the industry, employment rose in ambulatory health care services (+14,000). Over the prior 12 months, job growth in health care averaged 24,000 per month. In April, employment also continued its upward trend in social assistance (+7,000).

Employment changed little over the month in construction, with small offsetting movements in the residential and nonresidential components. Construction gained an average of 27,000 jobs per month over the prior 6 months. Manufacturing employment was unchanged in April.

Employment in other major industries, including mining and logging, wholesale trade, transportation and warehousing, financial activities, and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $23.87. Over the year, average hourly earnings have risen by 45 cents, or 1.9 percent. In April, average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $20.06.

The change in total nonfarm payroll employment for February was revised from +268,000 to +332,000, and the change for March was revised from +88,000 to +138,000. With these revisions, employment gains in February and March combined were 114,000 higher than previously reported.