The 'under' on jobs report takes the day

Source: Calculated Risk
Nonfarm payroll employment rose by 115,000 in April, and the unemployment rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics reported today. ... The civilian labor force participation rate declined in April to 63.6 percent, while the employment-population ratio, at 58.4 percent, changed little. ... The change in total nonfarm payroll employment for February was revised from +240,000 to +259,000, and the change for March was revised from +120,000 to +154,000. This was below expectations of 165,000 payroll jobs added. Job growth started picking up early last year, but then the economy was hit by a series of shocks (oil price increase, tsunami in Japan, debt ceiling debate) - and then growth started picking up again. Now it appears job growth has slowed again. This was a weak month, but the upward revisions to prior months was a small positive. The Labor Force Participation Rate decreased to 63.6% in April (blue line). This is the percentage of the working age population in the labor force and the participation rate is at a new post bubble low. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although some of the recent decline is due to demographics. The Employment-Population ratio declined slightly to 58.4% in April (black line). This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis. This was weaker payroll growth than expected (expected was 165,000). More later ...

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