Jobs Up, Oil Down, GREAT Friday!
Get ready for a double-dose of good news: the Labor Department April job creation was UP and oil prices are DOWN--hooray, great news for a Friday! In April, the US economy added 244,000 new non-farm jobs and the government revised the previous two months upward -- 221,000 jobs were added in March and 235,000 in February, for a net of 46,000 extra jobs that had not been reported.
The unemployment rate ticked up to 9.0 percent, as more out-of work Americans re-joined the labor pool. This is actually a good sign-unemployed Americans are starting to see a thawing in the job market and are now back in the game. See below for the rest of the April jobs report round-up.
Thankfully, this year has seen an improvement in the nation's employment situation, except for that dastardly January, when the weather was awful. In 2011, the US economy has created an average of nearly 190,000 jobs per month. That's a pretty good number, but remember that we need to see about 125,000 jobs a month just to keep pace with new entrants to the work force.
Despite the pick-up in hiring, we had other issues on our minds, like the Middle East uprising; the Japanese earthquake, tsunami and nuclear melt-down; soaring gas prices; and this week's news of Osama bin Laden's death and the commodities melt-down.
Of course the job market recovery is critical to everyone, but rising gas prices seemed to have taken center stage in the public's mind -- and of course the media loves a gas story, so we go overboard with the coverage ("give me (yet) another map showing where prices are the highest," bellowed one producer).
For weeks, I have been appearing on television and radio, disputing that the notion that we would see a national average of over $5 per gallon at the pumps in this cycle. There's still time for me to be wrong, but according to AAA, the average for a gallon of regular is $3.98 this morning, below the 2008 all-time high of $4.11. Given yesterday's massive sell-off in oil (June crude oil broke down below $100 a barrel, falling $9.44, or 8.6 percent, to $99.80 cents a barrel), I'm hopeful that gas prices will head lower.
Still, there's no disputing the negative effects of higher gas on our pocketbooks. UCSD economics Professor James D. Hamilton says that since January, Americans are paying an additional 80 cents a gallon, which translates to "an extra strain on consumer budgets of $112 billion over the course of a year, which is about .75% of a $15 trillion U.S. economy." Ouch!
I have argued that the rise of crude oil from $90 to $110 was based on fear and speculation. I thought that once investors were convinced that the Middle East conflict would be contained to Libya, then the price would retreat. A massive sell-off in silver (down 30 percent in a week), spurred in large part by new margin requirements imposed by the CME (finally!), has now accelerated a broader sell-off in commodities.
And riding to our rescue in the oil market was none other than...US consumers! As the price of gas started to rise, we pulled back on our consumption. Also, we learned our lesson after prices spiked in 2008 and slowed down our purchases of SUVs. And thankfully, at the very time gas prices were rising, we saw some decent gains in the labor market -- in last 12 months ended in March, 1.5 million jobs were added nationally.
Still, I don't want to sugar-coat a basic fact: the jobs situation remains grim for many Americans. There are still 13.7 million Americans currently unemployed; of those, 5.8 million have been unemployed for six months or more; 8.6 million are working part-time for economic reasons; and about 4 million more workers have left the labor force. According to Calculated Risk, the Great Recession and slow jobs recovery "is the worst since WWII in percentage terms, and the second-worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse)."
April Jobs Report
- April Jobs: +244,000 (best month in the past 11 months)
- April private sector: +268,000 (strongest month since February 2006)
- March Jobs: +221,000 from +216,000
- February Jobs: +235,00 from +194,000
- Total Jobs created since March, 2010: 1.8 million (+2.1 million in private sector)
- Unemployment Rate: 9.0 percent, from 8.8 percent in March
- Unemployed persons: 13.7 million, from 13.5 million
- Long-term unemployed (jobless for 27 weeks and over): 5.8, from 6.1 million in March. Represents 43.3 percent of the total unemployed
- Part-timers (hours cut for economic reasons): 8.6 million
- Average Hourly Earnings: up $0.03 to $22.95 (Over the past 12 months, average hourly earnings have increased by 1.9 percent)
- Average Workweek: 34.3 hours (unchanged)
- Retail: +57,000
- Professional/Business Services: +51,000
- Leisure and Hospitality: +46,000 (up 151,000 in past three months)
- Temporary Services: +34,000
- Health care: +37,000 (Over the prior 12 months, +283,000 jobs, or an average of 24,000 jobs per month)
- Government: -24K (all at the state and local level, sixth consecutive month of job losses. Over 400,000 total government jobs lost since peak in September 2008)
- Manufacturing: +29,000 (+250,000 jobs since December 2009)