DSNews The homepage of the servicing industry
The economy added 165,000 jobs in April--rebounding from a weak report for March--and the unemployment rate dropped to 7.5.percent, its lowest level since December 2008, the ""Bureau of Labor Statistics (BLS)"":http://www.bls.gov/news.release/archives/empsit_05032013.pdf reported Friday. Economists had forecast payrolls would grow by 153,000, and that the unemployment rate would remain at 7.6 percent.
[IMAGE]Payroll growth for March, originally reported at 88,000, was revised upward to 138,000, and February was revised to 332,000 from 268,000.
Average weekly hours fell to 34.4--the equivalent of job losses--while average hourly earnings rose.
Compared with the disappointing report for March, the April report showed very few negatives.
The labor force--the sum of employment and unemployment--rose for the month with employment increasing 293,000 and unemployment falling 83,000. Unemployment, as used in this report, is a defined term including individuals meeting three tests: out-of-work, available-for-work, and looking-for-work.
The labor force participation rate remained at 63.3 percent, low by historical standards. It had been 66.0 percent before the recession began in December 2007. The current rate is the lowest since December 1978, in part reflecting an increase in school enrollment, which could affect the ""available-for-work"" test.
The employment-population ratio, a broad measure of the employment status of all those over 16, rose to 58.6 percent, but is still far below 62.7 percent in December 2007. The inverse of the employment-population ratio is a crude unemployment measure, suggesting 41.4 percent of all those over 16 do not have jobs, without adjustment for students or otherwise not seeking jobs.
The net increase in payroll jobs came despite a loss of 11,000 government jobs--8,000 federal jobs, including 3,500 postal jobs. Local governments shed 2,000 jobs as state payrolls contracted by 1,000.
Most industry sectors showed gains, but the number of construction jobs fell a net 6,000. Most of the job losses involved non-residential construction.
[COLUMN_BREAK]Despite a drop in builder confidence, the number of residential construction jobs--including specialty contractors--increased 13,300.
The information sector dropped 9,000 jobs in April, primarily in the movie and sound recording industry, which could have regional impacts on the coasts.
Manufacturing jobs, according to the report, were flat in April after growing by a scant 2,000 in March, suggesting an impact of federal budget sequester cuts on defense-related employment, though the report does not contain a specific line item for defense related manufacturing or employment.
Professional and business services added 73,000 jobs in April, including almost 31,000 temp jobs, which are often considered an entry point to permanent employment. Temp jobs though can also reflect a lack of confidence on the part of employers.
The financial sector added 9,000 jobs, most of which were credit-related positions, such as underwriters, on the eve of the home-buying season. That said, the number of real estate jobs contracted by almost 2,000.
The weak spot in the report was the cut in the average workweek, which slipped back from 34.6 hours last month. Cutting hours is a technique used by some businesses to reduce payroll spending while at the same time keeping trained workers available for a rebound in the economy. The reduction in hours though--despite an increase in average hourly earnings--reduces average weekly earnings, which fell by $3.29 in April and will have an impact on consumer demand.
Reducing average weekly hours could also reflect a shift to part-time employment which rose 107,000 in April in a run-up to the implementation of the Affordable Care Act next January.
With the reduction in hours and average weekly earnings, aggregate wage income fell in April. Wages, on average, represent about 55 percent of total personal income, which fuels personal consumption spending.
The continued drop in the unemployment rate, which has fallen for three straight months, has added significance with the Federal Reserve having said the target fed funds rate would remain at its historic low, 0 to ¼ percent, at least until the unemployment rate fell below 6.5 percent. The Fed also set an inflation target for keeping rates low and continuing its program of purchasing mortgage securities and investing in U.S. Treasury securities. Inflation has remained tame since the Fed announced its plans for reversing course on monetary policy.
The number of persons out of work for 27 weeks or longer--""long term unemployed""--fell 258,000 to 4,353,000 the lowest level since May 2009 but the number of person unemployed 15 to 26 weeks rose 230,000.
_Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am eastern time._
