U.S. Economy Creates A Decent Number Of Jobs In April
May 5, 2014 Timothy Prickett Morgan
Go figure. Gross domestic product figures were lower than expected in the first quarter, but businesses didn’t know that until earlier this week, and so hiring among employers in the United States was up perhaps more strongly than expected. It is hard to argue cause and effect in an economy, so I won’t do that.
What I can say is that according to the latest jobs report from the Bureau of Labor Statistics, the U.S. economy added 288,000 non-farm jobs in April, matching spikes in February and November last year. The unemployment rate took a four-tenths of a percent dive, but news that the economy is warming in April after sluggishness in the cold winter months (that is not just a metaphor, it is literal) will probably get some of the long-term unemployed back to seeking jobs, so the unemployment rate could jump up in the coming months. (You are only considered unemployed when you are seeking a job, not when you don’t have one, as far as the Department of Labor is concerned.
The other good news is that after getting more survey data from the 144,000 companies that are in the poll, the BLS said that job creating was a little stronger in February and March. The BLS now says that 222,000 net new jobs were created in February (up from 192,000 in the original report) and in March there were 203,000 jobs added (up from the 192,000 in last month’s jobs report). Over the trailing 12 months, the U.S. has averaged 199,000 net new jobs per month, which nearly keeps up with the pace of job creation necessary to track along with population growth in the country.
By industry, professional and business services, retail trade, food services and drinking places, and construction all showed the strongest gains. The professional services sector added 75,000 jobs, retailers added 35,000 despite electronics retailers cutting 11,000 workers, and wholesalers added 16,000 workers. Construction companies added 32,000 people, and restaurants and bars added 33,000 workers. Healthcare companies boosted payrolls by 19,000 and mining companies added 10,000 net new people.
The unemployment rate keeps moving down, which is a good thing. Here is the line:
It will be interesting to see what Janet Yellen, chair of the Federal Reserve, does now. Yellen wants to push the unemployment rate down well below the 6.5 percent that her predecessor, Ben Bernanke, was willing to accept as a level of structural unemployment. As I have said before, it all depends on what happens to the inflation rate, which the Fed likes to keep around 2 percent on an annualized basis to avoid deflation. Deflation and stagflation are worse than unemployment or inflation because of the slash and burn effects they have on an economy.
The BLS doesn’t track employment by job title each quarter, but we can create a proxy of sorts from the data to see how the IT sector compares to the labor pool at large.
In manufacturing, computer and electronic product makers shed 2,400 workers, and had a labor pool of just under 1.06 million people. This was the second month of declines. Computer and equipment peripheral makers had 162,700 workers and added 200 in March, while semiconductor makers shed 1,500 jobs and ended the month with 367,200 employees. Communications equipment makers had 100,600 workers, up 700 from March.
In the information sector, the data processing and hosting industry added 100 workers, to a pool of 268,100 people, while telecommunications companies added 2,900 workers to make its labor force 857,500-strong. Companies engaged in computer systems design added 8,900 workers and employ 1.75 million people; management and technical consulting companies added 5,000 people in April, and ended the month with 1.22 million people on the payroll.
So, just as was the case in March, IT services seems to be doing well while IT product manufacturing and hosting is down. A mixed bag, as it usually is.