Unemployment Down, Jobs Up, Participation Up

The April Jobs Report is the third jobs report released for President Trump. The first two jobs reports had data that was very good. The Current Population Survey data, non-seasonally adjusted (NSA) showed a drop in the unemployment rate, an increase in the participation rate, and the creation of 595,000 full-time jobs and 475,000 part-time jobs during February. The CPS data in the March Jobs Report  revealed a similar pattern with fewer NSA unemployed workers, an increase in participation, and the creation of 956,000 full-time jobs and 77,000 part-time jobs. This was the best February CPS data since February 2003 and the best March data March  CPS data since March 2003. The unemployment rate comes from the CPS data. The participation rate comes from the CPS data.

Unfortunately, most news sources use the Current Employment Statistics (CES) SA "worker number" as their "jobs number."They often throw around the Non-Farm Payroll number and the Total Private Sector number interchangeably. The problem is that the seasonal factors used to convert the NSA CES data to the reported SA CES data change from month to month and year to year. The past two months have had the seasonal factors skewed low which skews the reported value low.

This column published a forecast article titled "Big League April Jobs Report Potential." That article detailed how March is hiring month, that unemployment should drop and participation should increase over the prior levels. The NSA CPS data from April 2013, 2014,  and 2015 were very strong. The weekly unemployment claims data for mid April was very good. If unemployment is dropping then we can hope that employment is increasing. The question has been how much is the dual job worker market masking true unemployment numbers? Fewer workers are participating more. That is the background to understanding the report that was released today.

The Headline Number Was 211,00 Non-farm "Jobs" Added. The Private Sector number was 194,000 Seasonally Adjusted Jobs.  Non-farm jobs include government jobs while private sector does not. The NSA CES private sector month to month growth rate was slightly better than 2012. It was also slower than 2010, 2011, and 2013-2016.It could have been reported lower. Maybe they are trying to make up for skewing the data low during February and March.

The True Jobs number revealed one of the Strongest Aprils since 2003. We have had back to back record levels of net CPS jobs created during February and March. Three consecutive months would have been astounding. April 2010 was strong because we were pulling out of a recession. April 2005 was great - then we were hit with the worst hurricane year on record with Katrina, Rita, and Wilma.  This April was better than 2014 when the full-time jobs and part-time jobs are combined. It was better than the April data for 2003, 2004, 2006, 2007-2009, 2011-2012, and 2015-16. You get the point. It was a good,

The Number of Unemployed Workers Fell under 7 million. The Unemployment Rate Fell. Both received a collective yawn. Low unemployment isn't "sexy."  We have 858,000 fewer unemployed workers, according to the NSA CPS data, than we had last April. The number of unemployed workers dropped to 6.555 Million. This is comparable to the number of unemployed workers during April 2007. That is not a typo. Crickets.

Participation Edged sideways. The Participation rate, non-seasonally adjusted, to dropped ever so slightly to 62.72% while the unemployment rate fell to 4.10%. Most economists consider 5% full employment. The problem is that the unemployment rate was 4.53% during April 2006 when we had a 65.82% participation rate. The problem is that we had 4.30% unemployment during April of 2007 when we had a participation rate  of 65.65%. If this is full employment then we had "fuller employment" during April 2006 and April 2007.

The number of Multiple Job Holders is down from last month, up from last April.  The number that has been skewing all the other numbers, other than the seasonal factors, has been the number of multiple job  workers. This will be detailed more next week. People can work two part-time jobs, two full-time jobs, or a part-time job and a full-time job. The number of multiple job workers fell by 508,000. The majority of the drop was for people working a full-time job and a part-time job. The second largest segment was for those working two part-time jobs.

We have a record level of jobs - and we haven't hit the potential July/August peak.  Jobs drop during January and peak during the Summer. We added part-time jobs while we lost full-time jobs during the recession. We recovered full-time jobs until the Summer of 2015 when we actually added FT jobs to the July 2007 FT job level peak. We lost those jobs as quickly as we added them. The "Job Creation" data that President Obama touted was actually a job recovery number. To be fair, the job losses started under President Bush. To be fair, the job losses continued through the first full year in office, hitting its worst level during January 2010. It took seven years to recover all of those lost full-time jobs. It was a part-time recovery.

This was a strong report. It was stronger than is being reported. It is also a little weaker, according to the CES data, than is being reported. The data will even out at some point in time. The talking heads are saying after 8 years of touting declining unemployment levels that unemployment levels don't matter anymore. Tell that to someone who lost a job during the recession and still hasn't found work or who can only find seasonal work. The participation level is improving. This will be addressed in the "Five Presidents" column next week. Someone has to stand up and say "We are Winning."

It's the economy.