By Thomas Cooley and Peter Rupert
The BLS release showed 164,000 new jobs, with 168,000 added in the private sector in April and the government sector declining by 4,000. Service sector jobs increased 119,000 and goods producing jobs increased 49,000. The mining and logging sector has had non-negative growth for the past year and a half after experiencing twenty five consecutive months of decline. Average hours of work remained at 34.5 and hourly earnings ticked up slightly, from $26.80 to $26.84.
The household data revealed a 3.93% unemployment rate, down from 4.07%, and is now the lowest rate the economy has seen in nearly two decades. The number of people in the labor force fell by 236,000 and the participation rate was down 0.1%. The continued improvement in the labor market, jobs and wages, will bring some added pressure to the FOMC to raise rates, given the “no change” verdict from the May 1-2 meeting:
Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.
Vacancies and Unemployment
Economists often refer to a “tight” labor market as one in which there are relatively many job openings (vacancies) compared to the number of unemployed persons searching. The latest data from JOLTS show that the number of vacancies was 6,052,000 in February and the number of unemployed job searchers was 6,585,000 in March, that is 1.09 openings per unemployed. The number of job openings is the highest ever recorded since the BLS began the series in December, 2000.
The BLS also reports job openings by industry. The most job vacancies are in Education and Health Services with 1,173,000 openings with 1,101,000 in Health Care and Social Services. The next highest was in Trade, Transportation and Utilities, 1,148,000, with 708,000 in retail trade.
The four graphs below show the levels of vacancies and the number of unemployed for the four census regions.
The Midwest labor market is extremely tight, with roughly 110,000 more vacancies than unemployed searchers. It is the only census region with more vacancies than unemployed; although the other regions appear to have tight labor markets as well. The only other place where that has happened since the JOLTS series began was in the Northeast in 2001, with 10,000 more vacancies than unemployed.
GDP
The BEA announced that real GDP grew at a 2.3% clip in the advance estimate for 2018Q1 and 2017Q4 was revised up to 2.9%. Consumption grew at a 1.1% pace after growing 4.0% in Q4. This is the slowest growth for real PCE since 2013. In spite of the strong growth and labor market, the consumer is not providing much of the fuel for the expansion.
