By Wolf Richter for WOLF STREET.
In April, employers added 175,000 payroll jobs – excluding farm workers and the self-employed – a slower pace from the upwardly revised March estimate of 315,000 additions, which had been huge. Over the past 12 months, the range has been between 165,000 and 315,000.
Over the past three months on average, employers added 242,000 jobs per month. This three-month average – which includes the revisions and irons out the artificial drama of the monthly squiggles – is high for normal times. Over the past 12 months, 2.8 million jobs were added. All according to the survey of employers — the “Establishment survey” by the Bureau of Labor Statistics today.
We can quibble with some of the details of the jobs report, and we’ll get to them, but overall, it was a solid picture of a strong labor market, with some factors normalizing from the pandemic distortions. It’s what you’d expect from an economy that’s plugging along at a pace that is faster than the normal pace over the past 15 years.
The total number of payroll jobs rose to a record 158.3 million:
Average hourly earnings rose in March at an annualized rate of 2.4%, the smallest increase in three years, also according to the “Establishment” survey data. Compared to a year ago, wages were up 4.0%:
Household survey data and mass immigration.
The BLS bases its employment and unemployment figures on the household survey data, which uses the population data from the Census Bureau. But an issue has been dogging the data for the past two or so years: The Census Bureau has massively underestimated population growth in its model by failing to account for the huge wave of mass-immigration in 2022 and 2023.
The Congressional Budget Office, however, has picked up on the surge of immigration and therefore the big population growth in 2022 and 2023. We discussed this and how it messes up the BLS household employment data. These are the two diverging population growth estimates:
The BLS, by applying its household survey data to the underestimated population count from the Census Bureau, understates total employment and the labor force which then distort all the other data.
Overall employment, which includes farm workers and the self-employed, and is based on the survey of households, had been rising roughly in parallel with payroll jobs from the employer survey (above). In the years before the pandemic, total employment was about 6.5 million higher than payroll jobs.
But since the vast undercount of immigration and therefore population growth from 2022 on, the difference has shrunk to just 3 million, from over 6 million.
The total number of workers per the household survey rose to 161.5 million. The three-month average rose to 161.3 million (red), which is just 3 million higher than the 158.3 million payroll jobs (blue).
And the difference between the two has shrunk to just 3 million as the employer data picks up the new workers, but the household data is applied to the underestimated population data. The Census Bureau needs to revise its population data to account for the big wave of immigration, which would fix this issue here:
The number of full-time workers jumped by 949,000 in April to 133.9 million.
Remember the undercount of the population? If counted correctly, this number would be much higher. This is one of the many charts that show the bizarre effects of the population undercount:
Part-time workers fell by 914,000 to 27.7 million. The three-month average fell to 28.1 million. As a percent of all workers, part-time workers dipped to 17.4%:
The labor force rose by 87,000 to 168.0 million. The labor force consists of people who are working and those who are not working but actively looking for work. It is also massively understated by the population undercount over the past two years.
That the labor force has dropped in prior months, despite the huge influx of immigrants looking for work or already working, demonstrates the impact on the Census Bureau’s undercount of immigration:
The prime-age labor participation rate – people between 24 and 54 – has returned to the multi-decade-high of 83.5%:
The number of unemployed rose to 6.49 million (blue). The three-month average rose to 6.46 million, where it had been in April 2018 (red).
The unemployment rates ranged from 1.3% for U-1, the narrowest definition, to 7.4% for U-6, the broadest definition.
U-3 is the headline unemployment rate (red in the chart below). It ticked up to 3.9% in April, same as in February. Overall, the rates have been edging higher but remain low compared to prepandemic years:
U-1: 1.3% (persons unemployed 15 weeks or longer, % of civilian labor force)U-2: 1.9% (job losers and persons who completed temporary jobs, % of civilian labor force)U-3: 3.9% (total unemployed, % of civilian labor force; official unemployment rate)U-4: 4.1% (total unemployed plus discouraged workers, % of civilian labor force plus discouraged workers)U-5: 4.8% (total unemployed, plus discouraged workers, plus all other marginally attached workers, % of civilian labor force plus all marginally attached workers)U-6: 7.3% (total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, % of civilian labor force plus all marginally attached workers).
Multiple jobholders as percentage of total workers have been just below 5.2% for five months in a row (three-month moving average), having returned to the normal range over the past 15 years. Before 2009, the rate was much higher.
Who are multiple jobholders? They include: corporate employees with a side gig, such as consultant or being a landlord with some housing units (small landlords with 1-9 rentals own 11 million single-family houses for rent, so this is a biggie); university educators who also work as consultants; engineers with a startup side gig; restaurant workers with revenue-producing YouTube channels; restaurant workers working shifts at different restaurants; cops working off-duty as security; people working from home doing two full-time tech jobs before they get laid off by one of them; executives who also serve as paid member of the board at other companies…. We all know some of them. Multiple job holders span the spectrum.
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