The economy gained far more jobs than economists had expected in April, while the U.S. unemployment rate dropped to its lowest level in 5-1/2 years.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the April unemployment rate dropped to 6.3 percent from 6.7 percent in March. The private sector netted 273,000 nonfarm job gains and local, state, and federal governments netted 15,000, for a total net gain of 288,000.
That’s the best nonfarm job gain since January 2012. Analysts had expected only around 210,000 net job gains in April.
Even better, the BLS also revised its job numbers for February and March, showing that the economy gained 36,000 more jobs than it had previously estimated. The BLS upwardly revised February job gains from 197,000 to 222,000 and those in March from 192,000 to 203,000.
The private sector has now gained nonfarm jobs for 50 consecutive months since the Great Recession. The U.S. economy has netted 9.2 million new private-sector jobs in that time.
At 75,000, the most notable April net job gains were in the professional and business services industry. Temporary help services (“temp workers”) gained 24,000 of those. The industry as a whole has netted an average of 55,000 jobs per month over the past year.
Next in line was the retail trade industry, with 35,000 net job gains. Employment in the industry has grown by 327,000 over the past year.
Employment in the construction industry continued to trend upward in April, with 32,000 net job gains. Construction has gained 189,000 jobs over the past year, with nearly three-fourths of the gain occurring in the past 6 months.
Over 100 American construction companies have pledged to hire more than 100,000 veterans within the next five years.
The healthcare industry added 19,000 jobs. The industry has averaged 17,000 net job gains per month over the past year. It was among the few industries that gained jobs every month throughout the Great Recession. Much of the industry’s job growth over the past few years is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in President Obama’s Affordable Care Act (“Obamacare”) as well.
Manufacturing, an industry that economists consider to be a gauge of labor market health, gained 12,000 jobs in April. The industry has gained a monthly average of 11,750 jobs so far in 2014.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (19.1 percent) followed by blacks (11.6), Hispanics (7.3), adult men (5.9), adult women (5.7), whites (5.3) and Asians (5.7, not seasonally adjusted). Unemployment rates declined from March for all groups but Asians, who experienced a 0.3 percent increase.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 3.3 percent unemployment rate in April, down slightly from 3.4 in March. Those in the same age group and who don’t have high school diplomas suffered a 8.9 percent rate, down significantly from 9.6.
The unemployment rate of 6.3 percent was the lowest since September 2008, when it was 6.1 percent and beginning to skyrocket toward 10.0 (the recessionary high).
The 0.4 percent drop in the April rate was partly because of the unexpected job gains and partly because thousands of workers left the workforce. Some left due to retirement while others left because they gave up on job searching. (More information about the latter, the so-called “discouraged workers,” is below.)
For the BLS to count workers as unemployed, they must be actively seeking jobs in the four weeks preceding the count. The BLS counted 9.8 million workers as unemployed in April, down significantly by 733,000 from March.
That count and the unemployment rate do not include workers who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers was 7.5 million in April, up from 7.4 million in March.
The average workweek for both part-timers and full-timers was 34.5 hours in April, the same as in March. Average hourly earnings were $24.31. Average hourly earnings have risen by 1.9 percent in a year.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there are no jobs.
The number of marginally-attached workers in April was 2.2 million, the same as in March. Among the marginally-attached, 783,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was significantly up from the 698,000 that the BLS initially reported in March. As previously mentioned, that’s partly why the unemployment rate dropped in April. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been without jobs for 27 weeks or longer, was 3.5 million in April, down by 287,000 from March. These workers accounted for 35.3 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.
Since the beginning of this year, congressional Republicans have blocked passing a bill to further extend federal unemployment benefits into 2014. See the blog “Unemployment Benefit Extensions 2013 – Updated for 2014” for updates on the 2014 extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
For more details about the April 2014 unemployment rate and related matters, see the “Employment Situation Summary” by the BLS. The BLS plans to report the May unemployment rate and job numbers on June 6. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.