Unemployment Falls Sharply to 6.3% as Economy Adds Nearly 300,000 Jobs, But Labor Pool Shrinks
FlaglerLive | May 2, 2014
People are reentering the workforce, they’re applying for work, they’re finding jobs, with an economy in March adding more net jobs for the 50th consecutive month–ironically, one of the longest peace-time recoveries on record, following the Great Recession of 2007-08. But a huge number of people are also leaving the workforce. That has resulted in an unemployment report for April that looks very bright at first, but that dims somewhat when analyzed more closely.
In April, the economy added 288,000 jobs, the second-best single-month showing in four years, and the unemployment rate fell sharply by 0.4 points, to 6.3 percent, its lowest level since September 2008. In the last three months, the economy has added a net 713,000 jobs, reducing the total number of unemployed to 9.8 million. The unemployment rate peaked at 10 percent in October 2009. The national unemployment rate now matches that of Florida, which ticked up to 6.3 percent in April, from 6.2 percent the previous month.
On the other hand, the labor force overall shrank by 806,000 people. The previous month, the labor force had grown by 503,000. The 0.4 percent drop in the civilian labor participation rate, to 62.8 percent, is among the sharpest in recent years. But month-to-month rises and drops are less telling than trends, and over the past 12 months, the participation rate has shown little change.
Also disappointing: the number of unemployed re-entrants, that is, people who used to be in the labor force, dropped out, then chose to return to the labor force in April, fell by 417,000. The number of new entrants in the labor force–people entering it for the first time, like recent college or high school graduates–fell by 126,000.
The number of people employed part-time because they could not find full-time work, or because their hours had been cut back against their will, remained at 7.5 million. Those are the under-employed, whose presence in the labor force artificially depresses the official unemployment rate. That rate also does not include people who have left the labor force altogether–people who are no longer counted among the unemployed. When the underemployed and the discouraged are included, the so-called U-6, or alternative, unemployment and underemployment rate stands at 12.3 percent, almost double the official rate. Nevertheless, even that rate has fallen sharply, from 12.7 percent the previous month, and from 13.9 percent a year ago. Florida’s U-6 unemployment rate is at 14.3 percent.
Among the economy’s biggest winners: construction (32,000 new jobs), retail (35,000) and professional and business services (75,000).
The average workweek for all employees on private payrolls was unchanged at 34.5 hours in April. The manufacturing workweek decreased by 0.2 hour, to 40.8 hours. Average hourly earnings for all employees were unchanged at $24.31, rising by a paltry 1.9 percent over the last 12 months.