The Labor Department reported that the U.S. economy created the most new jobs in over two years and the unemployment rate fell to the lowest level since late-2008, however, it is unclear how much of the improvement is due to improving fundamentals and how much was driven by a larger than expected spring bounce after a severe winter.
A simple 3-month average shows that jobs gains rose to 238,000, the highest level since March 2012 and the fifth best reading since the recession ended almost five years ago.
Upward revisions to recent data were key in this calculation as February job gains were boosted from 197,000 to 222,000 and March job creation rose from 192,000 to 203,000, indicating the bounce-back from December and January came earlier than first believed.
The jobless rate dropped from 6.7 percent to 6.3 percent, however, the number of people counted as employed actually fell by 73,000! The ranks of the unemployed fell much more, by a whopping 733,000, as all of these people (and then some) exited the labor force.
[Related: New Jobless Claims Plunge to 300K, Much Better Than Forecast]
The number of people counted as “not in the labor force” jumped by a stunning 988,000 and, in what may be the most interesting data point of the entire report, exactly zero of these nearly 1 million people still want a job.
Not surprisingly, the labor force participation rate reversed its recent upward course by falling from 63.2 percent to 62.8 percent while the broader measure of unemployment, counting marginally attached and involuntary part-time workers, fell from 12.7 percent in March to 12.3 percent in April. All told, the household survey clearly indicates that more people have just chosen not to work anymore and one can’t help but wonder about the impact of Obamacare in facilitating this.
Returning to the establishment survey, job growth was broad-based last month, led by big gains in professional and business services (+75,000) and trade, transportation, and utilities (+59,000). Within these two groups, temporary jobs (+27,600) and retail trade (+34,500), respectively, paced the overall gains.
The education and health care group added their typical number of new jobs (+40,000) while construction rebounded (+32,000), and restaurants were hiring briskly as payrolls in the leisure and hospitality sector jumped (+28,000). What is somewhat surprising when looking closely at the payrolls data is just how broad-based the hiring was.
Government payrolls also rose as a decline at the federal level (-3,000) and only modest gains at the state level (+1,000) were more than offset by the surge in local government hiring (+17,000), no doubt influenced by rising tax revenues that have been driven, in part, by rising home prices.
