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Seemingly Terrific April Jobs Report Poses Strange Puzzle

Posted on May 3, 2014

Funky job reports are not unusual, and the employment data for April certainly fits the bill. How else to explain the biggest gain in hiring in more than two years – at the same time the labor force shrank by the second largest amount in 32 years.

Let’s review. The U.S. added 288,000 jobs in April, the biggest spike since January 2012. The increase in employment is measured by the so-called establishment survey that quizzes private firms, government work sites and nonprofit institutions.

Yet the size of the labor force sank by 806,000. That’s the biggest drop since a 848,000 plunge in October and you have to go all the way back to 1981 to find another 800,000-plus decline. Labor-force changes are measured by the “household” survey that interviews Americans directly.

Typically a shrinkage in the labor force occurs when people become so discouraged about finding a job that they give up looking for work. Yet the April surge in hiring would suggest that more jobs – not fewer – are available.

“You have drastically different messages offered by the establishment and household surveys,” said Stephen Stanley, chief economist of Pierpont Securities. He called the report “puzzling.”

What’s also odd about the decline in the labor force is how it happened. The number of so-called re-entrants – unemployed workers who have started looking for jobs again – fell by a whopping 417,000. That’s the biggest drop since the government began keeping records in 1967.

And new entrants into the labor force, such as graduates or immigrants, fell by 126,000. That’s the biggest decline in more than five years.

Put another way, two-thirds of the drop in the labor force stemmed from people choosing not to enter in the first place. Normally a decline takes place when workers exit the labor force.

In all likelihood, the plunge in the labor force in April reflects seasonal-adjustment quirks that will soon fade. The number should generally be ignored, in other words. “This data tends to be very volatile from one month to the next,” Stanley noted.

Another possibility is that the decline reflects a reversion to a long-time trend in which the labor-force participation rate continues to fall. The rate had declined steadily since the end of the recession in mid-2009 before surprisingly turning higher in early 2014.

The big drop in April – to 62.8% from 63.2% – drove the participation rate back down to a post-recession bottom and matched a 35-year low. The rate tells us the percentage of Americans 16 or older who have a job or want one.

“We saw a rise in the participation rate over the past few months that didn’t make sense,” said Bricklin Dwyer, a senior economist at BNP Paribas. “So now we’ve gone back to what the trend was.”

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15 thoughts on “Seemingly Terrific April Jobs Report Poses Strange Puzzle

  1. Kent Groth says:

    This is what happens when the administration LIES.

  2. Simple answer is ? All the info put out by gov is completely false and contrived misinformation. That is beyond obvious if you watch the reportings and then observe the capitulations/changes after the fact that are never mentioned in PRAVDA/MSM.
    And consider this little tidbit ? What about the massive debt that has been created and nothing has been fixed or resolved ? In fact it has gotten far worse because of the debt that can never be repaid ? Again you never see this mentioned by PRAVDA/MSM . They spin the fable that the fake prosperity and rising markets will repay the debt? HA AH AH AH AH AH HA HA ! This has been the largest scam in the history of mankind and all is nothing but a giant control mechanism deliberately used against you. So what happens when the dance is over and the lies have faded to reality ?

  3. Goober says:

    If you ask a democrat who they think is doing a good job in washington, you're only going to get a democrat answer. If you believe the numbers washington is throwing out to the public, then I feel sorry for you. The media released the fact that over 800,000 people have just gave up on finding a job worth having, but want to brag about how the administration has created 288,000 jobs in April. I'm sure McDonald's, Burger King, and all of the other job creators are very proud of their accomplishment. Oh, and mopping floors for big industry doesn't sound like a great job, but at least your working paying for someone Else's health care huh?

  4. RLOwen says:

    Do not look at the participation rate as a theoretical ratio, think of it as one third of the population willing to work can't find a job. In twenty percent of households no one has a job. In our sixth year of disaster and no real change. But the administration finagles figures, lies, smiles, and tells us how they are doing a great job. I would hate to see their definition of a bad job. See my blog at http://cranky-conservative.blogspot.com

  5. podunk1 says:

    Yes the numbers are fraudulent. There is no credible reference or consistency.

    Using 1997/2008 12 years reference average, BLS workforce to eligible population ratio was 66.511%.
    April workforce would be 164,574,000 (rounded) @ 66.511% of BLS’ 247,439,000 population… not 155,421,000.
    April 145,669,000 BLS employed puts unemployment at 18,906,000 (11.49%), not 9,753,000 (6.28%)! BLS did report 6,146,000 want a job and 3,007,000 simply disappeared! There is no accountability for the 9,153,000 (5.56%) that mysteriously “disappeared” from the “official public report!

    Comparable March 247,258,000 BLS population @ avg 66.511% yields 164,574,000 (rounded) workforce and 18,713,000 unemployment @ 11.38%… slightly better than March!.

    BLS 34.5 hours worked means employed worked 86.25% of full time 40 hrs., which says 145,669,000 workers shared 125,640,000 jobs and 20,029,000 (12.17%) jobs and earnings didn’t exist, vs. full 40 hour employment!. BLS says hours worked haven’t been dropping??? 34.5 hr/wk is highly questionable if media claims of significantly decreasibg hours worked is true!

    The combined joblessness 40/hr employment was 38,935,000 rounded (23.66%). That, at the BLS avg. $24.31/hr wage says we’re losing $2 trillion per year in wages and $1 trillion/yr in taxes if 25% employee taxes plus 30% employer tax/regs/benes (?)! Government revenues are not only LOST, but joblessness triggers significant subsidies!!!

    Obama, Holder, and the progressive legislative majority are inviting, aiding, abetting, and lavishly subsidizing 11 to 20 million tax evading criminal alien invaders. That inflates the workforce and drives down citizen employment, opportunity, and wages! It costs citizens trillions!!

    Deeds and results match the (1967) Webster Dictionary definition of sedition! Webster says “any attempt to overthrow the government of a state to which one owes allegiance”, defines the word treason, wherever used! Look it up and absorb the deception and disinformation flooding citizens!

  6. podunk1 says:

    Right on! The simple answer is a summary level overview audit that includes internal control (beginning with voting eligibility & SSI trust fund relative to $BOH, funding (PONZI), and inflation/devaluation practices) by a credible CPA firm. We'll need a tax increase to build enough jails for all who earned time, but it will be worth it. Congress has the authority to do it. GAO, OMB, & GASB are as corrupt as it gets!

  7. podunk1 says:

    Reference BLS April Household data, table A – LOOK IT UP!
    BLS April workforce population was 247,439,000 vs 247,258,000 = increase 181,000 growth

    BLS reported workforce April 155,421,000 was 156,227,000 March = 806,000 DECREASE!!
    ** BLS @ 66.511% w/f population = 164,574,000(rounded & 164,454,000March = 120,000 INCREASE!!

    BLS employed April 145,669,000 vs. 145,742,000 Mar = 73,000 DECREASE!! (lost employment)

    BLS reported unemployment 9,753,000 April vs. 10,436,000 March = 306,000 DECREASE!!
    /// (on less jobs??) ///
    ** BLS unemployed vs 12yr/avg (1997/2008) 18,906 April vs. 18,703,000 March = 203,000 les unemployment

    Lost work hours noted above points to an additional 20,029,000 lost jobs in April!

    The 12 year 66.511% average is based on 1997 through 2008year end population and workforce numbers reported, representing 8 Bush years and 4 of Clinton. A 16 yr. Average is slightly higher (better).

    The analytical conclusion assuming highly educated and qualified officials is extreme malice and fraud!
    1. Without a base line consistent reference point the report is counterproductive and designed to deceive!
    /// .. 18,906,000 (11.49%)“Unemployment” (workforce vs. employed) is 9,153,000 more than reported!
    ///… BLS 6,146,000 “want jobs” is fraud… obviously someone with ethics unsuccessfully crying foul.
    /// .. The 3,007,000 omission is manipulation of workforce is fraud!
    2. Any accountant or official publishing garbage like this would be subject to criminal and civil charges in the private sector (SEC, banks, stock & bond holders, etc.) Unquestionably this “company would fail, is failing, and 316,000,000 citizens will lose their freedom and possessions to tyranny!

    LINKAGE??? YES!!! 12 to 30 million criminal alien invaders protected and paid for by progressive officials for their vote, to destroy national sovereignty and Constitutional freedom plus bankrupt and reap the spoils of the USA.

  8. podunk1 says:

    posted some back-up numbers for what you said… use them pass them on… Hold these rats to truth

  9. They announce a number that they hope will bolster their image, but a few weeks later, they quietly "adjust" the figure downward and publish that number in the back pages of the business news. If they want to get the economy going and raise the GDP from 1/10 of 1% (which is abysmal) they need over 400,000 new GOOD jobs a month. Another thing they forget to mention is that the majority of the new jobs are low wage, part time jobs, not jobs that can adequately support a person and their family. Just kicking people off the unemployment lists doesn't give them jobs, doesn't give them hope…

  10. ncbill12 says:

    Labor force participation rate appears rapidly headed back to the 1960s.

    There are probably not enough full-time jobs anymore for each adult in a household to have one.

    To give an example we know one family where the adult daughter & her son have moved back in with her mom & dad.

    Between all 3 adults only one has a full-time job, but pre-2009 all 3 adults were working full-time, and would still prefer to do so.

  11. podunk1 says:

    ** BLS unemployed vs 12yr… the 18,703,000 should read 18,713,000 & the 203,000 should read 193,000 — typo into program calculations sorry about that… slippery keys

  12. I would almost, ALMOST, bet that IF the repubs win the next 2 elections, the REAL [maybe] employment/unemployment rates MIGHT be published, so the repubs could say that their policies actually work. The REAL measure of JOB growth is the publishing of ACTUAL PAYROLLS, so you can compare real jobs as opposed to fabricated numbers by this administration.

  13. 1baronrichsnot1 says:

    Might as well file 13 all of BLS findings! They mean nothing, it is arranged so that the so called statistics are reported how they want them reported. Doesn't provide anything, not true unemployment, not how many people lost jobs, not how many reached employable age but haven't worked yet.. When you are unemployed, have exhausted unemployment benefits, still haven't found a job, then the BLS will delist you to become almost a non person. Their numbers consist of a listing of people who want to work, and people who don't want work. You become a person not wanting work, a person who slipped through the cracks, wasn't employable, and awaits dependency on the gov't for welfare, and not a person reasonably searching for a job! Just a twisted, political maze of deception, so you enter the real unemployed which is all told about 14% of the population who truly want a job and a future.

  14. Lorraine E says:

    Government Shadow Stats reports the true unemployment rate of 24%.

  15. DefendConstitution says:

    Come on now, give the poor half-black faux POTUS a break. No matter what happens, you must remember that figures never lie. Unfortunately, liars sure do figure.