Here are the job market and compensation numbers for April 2008 (based on the job report):
Net loss of 20,000 jobs in the month (revised to a loss of 28,000)
- 4th consecutive month of labor reduction
- March had a loss of 81,000, so a loss of 20,000 is moving in the right direction
- Analysts expected a loss of 75,000 jobs for April
- 260,000 jobs have been lost so far in 2008 (first four months of the year)
- That is an average of 65,000 a month
- During the 2001 recession the average was 121,000 jobs lost a month and in same period in 1990 it was an average of 123,000
- But it was a jobless recovery from 2001, so companies might already be lean in comparison to those times
- Strangely, the corresponding household survey that includes self-employed individuals saw a net increase of 173,000 people joining the workforce in the month (this is a volatile survey).
Unemployment rate moved down to 5.0%
- Economists expected the rate to increase to 5.2% rather than a drop to 5.0%
- Part time workers increased to 306,000. These are people that want full time jobs.
- This improves the unemployment rate, but reflects a weak job market
- This is the highest number since November of 2005
- Unemployment length increased in April to 9.2 weeks from 8.1 weeks in March
- Taking into consideration those no longer looking for work and added to those looking, that number is 9.2% – a 0.1% rise from March
- Those not looking for work rose from 399,000 last year to 412,000 this April
- Those jobless for at least 27 weeks, AKA long term unemployed, rose last month to 17.8% from 16.7% in March
- The 12 month average unemployment now stands at 4.5%
- An employment number of 6% isn’t expected this year, compare that to similar situation: 1992 was 7.8% and 6.3% in 2003
Wages increased a penny to $17.88
- Smallest increase in almost two years
- The rate of growth of wages has dropped since the end of 2006
- Over the last year, average weekly wages are up 3.1%
- Costs of food and energy are canceling out that improvement
- Inflation over the same period (12 months) is 4%, indicating pay isn’t staying in line
- Companies are reducing work hours (trying to avoid layoffs until economy picks up)
- 33.7 weekly hours is a drop from 33.8 in March (correlating to the increase in part time work)
- The number of part time workers is 5.2 million.
- It was 4.9 million in March
- As a percentage of the population, part time workers are at their highest amount since 1995
- The average weekly pay for normal workers is $602.56 (adjusted for inflation).
- That is down $3.55 in April (this is for 80% of the population)
- Because of the narrow increase in pay and the reduced number of hours worked, the weekly wages suffered its biggest drop in almost two years
Specific Segment Job numbers:
- Manufacturing loss 46,000 jobs in April
- 326,000 in the last year
- Construction loss 61,000 jobs
- Retailers loss 26,800 jobs
- Health Care gained 37,000 jobs
- Professional and business services (architects, accountants, and management consultants) added 39,000 jobs
- This number is questioned however, and expected to be revised
- There was a loss of 44,000 last month
- The financial sector added 3,000 jobs
- This is after 8 months of losses due to the credit situation
- Restaurants and bars employed and additional 18,000 people
- This is often an indication of an improving economy since people are eating out more often
- 29,000 total jobs were lost in the private sector
- It is the 5th straight month of losses outside of government payrolls
Question:
Is this report the tipping point back to a positive economy or is it just a fluke month of reports?
Working Thoughts 