Most private sector categories added jobs, with Professional & Business Services (which includes Temporary Employment Agencies) again leading the way. Public sector employment also grew, chiefly due to hiring in local government.
Temporary Labor Levels Set Record for Tenth Consecutive Month
April New Job Creation – An Encouraging Start to 2Q14
The BLS Employment Situation report tallied a higher than expected 288,000 new jobs in April. After a harsh winter that seemed to slow both hiring and US economic expansion, April’s strong employment figures are a welcome sign of renewed growth. Another positive feature of the release was that February and March new job numbers were revised upward by a combined 36,000, taking both months over the 200,000 new job mark.
April Unemployment Rate Declines
Having remained level since December, the unemployment rate in April dropped 0.4% to 6.3%, the lowest level since September 2008. The rate of job loss declined, and the most comprehensive measure of the unemployment rate (U-6), which includes those involuntarily working in part-time positions, likewise declined 0.4% to 12.3%. Potentially foreshadowing a tightening for high skill labor, the unemployment rate for workers with a four year college degree fell to 3.3%.
Lingering Concerns in the Details
Strong job creation and a decline in the unemployment rates are encouraging, yet April 2014 is not the month that the Employment Situation report brings unalloyed good news. Some of the decline in the unemployment rate is attributable to new job creation, but a 0.4% drop in the Labor Force Participation Rate to 62.8% must also be taken into account. The rate of unemployment can be driven downward by either people getting jobs or by potential workers removing themselves from the equation. The size of the US Civilian Labor Force declined by 806,000 from March, pushing the number of working age people not participating in the workforce above 92 million. The chief factor in the rise of the number of non-participation appears to be a hesitancy by potential workers to enter or reenter the workforce.
The average wage and the average length of the work week both remained flat in April, suggesting a continuing abundant supply of available labor in the US.
Temp Employment Sets Record for Tenth Consecutive Month
Temporary Staffing Agency employment set another record high in April, adding 24,000 new jobs. Because of robust job creation in other industry sectors, Temp Agency employment as a percent of total nonfarm employment was flat at 2.06%.
The April revisions to temporary labor employment estimates were both slightly downward. Over the past three months temp employment has been growing at a steady rate of 25,000 new jobs per month.
The robust April 2014 new job creation figures and the decline in the unemployment rate were both welcome news. Some concern must remain that the decline in unemployment is in part attributable to potential workers choosing not to participate in the labor force. The absence of wage pressure and stagnant hours worked suggests that the labor market has continuing excess supply. Temporary labor continues to be a major portal for job market entry and temp employment can be expected to continue growing as the overall employment picture improves.