Thoughts on the April 2010 Employment Report
This morning, the Bureau of Labor Statistics released the “Employment Situation” for April 2010. This is the monthly “jobs” report documenting changes in the U.S. labor market. The headline jobs number—an increase of 290,000 non-farm payroll jobs (224,000 if we exclude new temporary Census jobs)—appears heartening. Yet the unemployment rate rose to 9.9% in April, up from 9.7% in March. In fact, this was really an increase of only .011%, from 9.75% to 9.86%. The optimists attribute this rise in unemployment to “discouraged” workers returning to the labor force—discouraged workers aren’t considered “unemployed” in the most popular measure of unemployment, which is known as U3. In fact, 805,000 workers joined the labor force in April, while the population increased by only 170,000, for an increase of 635,000.
However, the broadest measure of unemployment, which includes discouraged workers and is known as U6, rose to 17.1% in April, up from 16.9% in May and 16.5% in January. This translates into a staggering 26.5 million unemployed or underemployed workers. How can we reconcile these figures? We do so by noting that U6 also includes part-timers who wanted to work full-time but were unable to find full-time jobs). This is also a dirty little secret of the current employment market—the jobs number includes a growing number of part-timers who can’t find full-time work.
The number of part-time workers doing so because they couldn’t find full-time work or because of slack work or business conditions rose by 192,000, accounting for the bulk of the growth in payroll jobs. Their inclusion in U3 masks the continuing deterioration in the labor market.
More evidence of growing problems in the labor market are the “long-term unemployed,” which is the category of workers out of work for more than 26 weeks. This category grew to 6.72 million, up from 6.55 million in March and 6.31 million in January.
This jobs market is especially cruel to the less educated and to minorities. The overall unemployment rate of 9.9% masks the 10.6% rate for high-school grads and 14.7% rate for those without a high-school diploma, and the 12.5% rate for Hispanics and the 16.5% for African Americans. Interestingly, these are the same demographics that voted overwhelmingly for President Obama, essentially putting him in office. Yet their employment prospects have uniformly deteriorated during Obama’s now 16-month tenure. This bodes poorly for Democrat prospects come the November 2010 elections, unless the job market turns around quickly.
Also of note is the impact of Census workers. Census reports that it had hired 66,000 workers in April and will employ more than 600,000 temporary workers by the end of May. These temporary workers will skew the employment numbers upwards and unemployment downward during their six-months of work, and will lose their jobs just before voters go to the polls in November. Democrats can only hope that these job losses show up in the November employment report and not the October employment report. Look for Census to “find” some way to keep these workers on the government dole through October to ensure that this unpleasant news doesn’t reach voters until after the 2010 elections are history.
