Good day, everyone!
Although I suppose you might not know it’s a good day if you’re watching mainstream media.
The folks at CNBC and Bloomberg have been hard at work all morning distributing doom and gloom following the April jobs report released early Friday.
Yes, it was incredibly disappointing if you were one of the myriad economists expecting nearly a million jobs created for the month. When you miss your forecast by 75%, you should be disappointed.
Source: Trading Economics
But details matter.
The hardest-hit demographic during the COVID-19 crisis was, by far, low-wage workers in the entertainment, leisure and hospitality industries.
Today’s jobs report, in contrast, shows quite clearly that those jobs are the ones now returning (+331,000) as America gets vaccinated and those businesses reopen.
Source: BLS, CNBC
And while netting 266,000 jobs on the month may look tepid compared to the gangbuster numbers posted in March, on a rate of change basis, April was nothing short of historic.
In fact, to find another month with a year-on-year, seasonally adjusted improvement in jobs of 10.87%, we have to go all the way back — more than 70 years — to the twin crises of the Great Depression and World War II.
And the fact that even the lowest estimate (+700,000 jobs expected) was expecting a figure more than four times this level should give us all an idea about their level of awareness.
The most promising number in the report, however, was that we added 667,000 people (not seasonally adjusted) back into the labor force. While there remains a long way to go, that’s the number we desperately need to continue increasing.
We should note there is some speculation about whether or not the Federal government’s enhanced unemployment benefits are causing some potential workforce participants to stay home rather than seek out work.
While that’s an incredibly easy claim to make on social media, it’s a much harder one to prove with data. Split by sex, we can’t tell much other than labor force participation rates are improving slightly more for men than women.
That is at least consistent with reports that women are being disproportionately affected by issues related to child care, such as virtual learning.
However, when we break down the labor force participation rate for men, we can see that minority participation is improving at a much faster rate than for white males 20 and over.
African-American and Hispanic/Latino men are very close to returning to pre-pandemic levels of participation, and that runs directly counter to the media narrative that enhanced U.I. benefits are encouraging workers to stay home.
With a smattering of state legislatures attempting to cut off those benefits early, we may very well know soon enough.
Until then, the country will continue to gradually get vaccinated and the economy will slowly but surely reopen.
And this month’s “dismal” jobs number will serve as an easy comparison to blow out of the water next month.