The Employment Situation, April
The April Employment Report came in better than anticipated, with a total loss of just 20,000 nonfarm jobs from payrolls. Revisions to February and March numbers increased the losses in those months by just 8,000. The unemployment rate edged slightly lower, from 5.1 percent to 5.0 percent over the month.
While this month's Employment Report paints a less bleak picture than recent months, it is still indicative of a weak labor market in many areas. The goods-producing sector as a whole continued its 13-month decline, losing 110,000 jobs, its largest loss since February 2007. Service-providing industries, however, created 90,000 jobs, an impressive gain compared with March's very modest 7,000 gain.
Within the goods-producing sector, manufacturing accounted for 46,000 of the payroll losses, and construction accounted for 61,000. Durable goods manufacturing fared far worse than nondurable, losing 43,000 versus just 3,000. Within durables, transportation equipment (-19,000) and fabricated metal products (-11,300) fared the worst. Food manufacturing was the most positive influence on nondurable goods, adding 1,700 jobs.
The largest contributors to gains in the service industry were education and health professions; professional and business services; and leisure and hospitality. Most of the 52,000 job gain in education and health professions came on the health care end (36,900). This is even larger than last month's gain of 43,000 and represents the sector's best performance since August of last year. The 39,000 payroll gain in professional and business services pulled the sector out of its three-month-long slump, and was largely due to solid gains in professional and technical services (26,800) and computer systems design (10,200). Leisure and hospitality's 18,000 gain was led by food services and accommodation (20,000). It is worth noting that financial activities, although a small source of April's service-industry payroll gains, came in positive for the first time since last July, adding 3,000 jobs.
Retail lost 26,800 jobs in April, continuing its negative trend begun in December. In particular, building materials stores and department stores lost the most jobs within the industry. Food and beverage stores lost jobs (4,400) for the first time since last April. Temporary help services, which is often regarded as a leading indicator of overall employment conditions, lost just 9,300 payrolls, compared to March's larger loss of 25,000.
|Average monthly change (thousands of employees, NAICS)|
|2005||2006||2007||YTD 2008||April 2008|
|Heavy and civil engineering||4||3||-1||-9||-15.7|
|Temporary help services||17||1||-7||-19||-9.3|
|Education and health svcs.||36||39||44||48||52|
|Leisure and hospitality||23||32||29||15||18|
|Local educational services||6||6||5||5||-0.7|
|Average for period (percent)|
|Civilian unemployment rate||5.1||4.6||4.6||5.0||5.0|
a. Includes construction of residential buildings and residential specialty trade contractors.
b. Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
c. Includes the finance, insurance, and real estate sector and the rental and leasing sector.
d. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services).
Source: Bureau of Labor Statistics.
The three-month moving average of private sector employment growth inched up from -94,000 in last report to -78,000 in this report. This measure can provide a cleaner read of labor market conditions because it removes some of the monthly volatility and the consistent boost provided by the government. Due to the government's positive contribution of 9,000 jobs last month, April's private nonfarm payroll change actually looks less optimistic than the total nonfarm payroll change. Private nonfarm payrolls declined by 29,000 in April. The diffusion index of private employment fell from 48 to 45.4, meaning that even more private employers cut back payrolls in April than in March.