The Employment Situation in April – A Bad Month

The Bureau of Labor Statistics (BLS) reported payroll employment expanded by 160 thousand in April, below analysts’ expectations of roughly 200 thousand, and revised the prior two months down by 19 thousand. The unemployment rate held steady at 5.0% based on a large decline in the number of persons employed (316 thousand) offset by a similar decline in the labor force (362 thousand). The labor force participation rate declined to 62.8% from 63.0% in March.

Over longer periods some of the decline in the labor force can be attributed to an aging population, notably retiring baby boomers. Roughly two thirds of the 3.4 percentage point decline in the labor force participation rate since 2007 (pre-recession) can be attributed to retiring boomers. But the decline in the labor force in April was nearly evenly distributed among young and middle age workers, the number of workers age 55 and over increased from March to April.

No alarm bells necessary. Monthly data can be volatile. This month’s report is an outlier compared to the solid two year trend. But it goes into the books as an undeniably bad month.

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