April Jobs Numbers: Grim But Not Getting Worse

The April employment numbers are out and somewhat more positive although the underlying data is only marginally better. The headline number, the unemployment rate, rose to 8.9% for April versus 8.5% for March.

Overall, employers cut 539,000 jobs in April. A rise in government jobs, up 72,000, helped the overall picture. Private sector job cuts were 611,000. In March the private sector lost 693,000 jobs.

The following chart from Jake at EconompicData.com aptly demonstrates where the pain is greatest:

Here are some selected comments from economists at the WSJ Real Time Economics blog:

 

  • This is less bad than the 690,000 average in February and March, and both manufacturing and service losses slowed, but it is hardly a triumph or even a stabilization. It is terrible, as is the rise in the unemployment rate to 8.9% from 8.5%. Soaring unemployment is depressing wage gains… There’s much further to go here; seriously bad news because without wage gains people can’t deleverage unless they cut spending deeply. –Ian Shepherdson, High Frequency Economics
  • The details of the report were somewhat less encouraging than the headline number would suggest. The losses were equally split between the services producing and goods-producing sectors. The key catalyst for the improvement during the month was public sector hiring, as government payrolls added 72,000 jobs due to 2010 Census hiring… Taken together, this was a very strong report as it suggests that the pace of deterioration in the U.S. labor market may be easing. Notwithstanding, it is clearly evident that labor market conditions remain very dismal, and the growing difficulty of displaced workers in finding new jobs will continue to place further upward pressure on the unemployment rate, which is now at its highest level in over 25 years. –Millan L. B. Mulraine, TD Securities
  • The report is consistent with the notion that the pace of deterioration is slowing but we are still a long way from the point of stability in both the labor market and the broader economy. About 500,000 individuals will eventually be hired for a short period of time to conduct the 2010 Census. Most of these workers will show up in the payroll tally next spring and disappear by the late-summer or fall. However, because of controversy surrounding the accuracy of past census efforts, the government has implemented a special program to confirm residential addresses ahead of time. This resulted in 63,000 federal government hires in April and indications are that another 80,000 or so are likely to be hired for this task over the next few months. There is no indication of how long these workers will be needed. In any case, this is an important distortion that should be excluded from the payroll tally. Thus, the census-adjusted payroll result for April was -602,000. –David Greenlaw, Morgan Stanley
It’s hard to be optimistic when you see these numbers and realize the human suffering that stands behind them. Sure, from a purely analytical point of view the report represents a bit of a positive but it also shows how far we’ve fallen and thus how long a climb out it is going to be.
more: here
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