Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Nonfarm Payrolls Increased 266,000 in April
Posted Under: Data Watch • Employment • Government • COVID-19

 
Implications:  The April employment report was disappointing, but not a total dud.  It was disappointing because payrolls increased only 266,000 for the month, a huge miss versus the 1,000,000 gain the consensus expected and well lower than the forecast from any economics group.  Civilian employment, an alternative measure of jobs that includes small-business start-ups, increased a similar 328,000 and the unemployment rate ticked up to 6.1%.  Manufacturing, retail, transportation & warehousing, professional & business services, and education all lost jobs in April.  But all the news on the labor market wasn't bad and some of it was downright positive.  Average weekly hours hit 35.0 in April, tying a record high, and the total number of private-sector hours worked increased 0.5%.  This kind of increase in hours would normally be associated with an increase in private payrolls of about 600,000, not the 218,000 by which private payrolls actually grew in April.  Meanwhile, average hourly earnings rose 0.7% in April, even as many employers were bringing back lower-paid workers; for example, leisure and hospitality payrolls increased 331,000.  Combining average hourly earnings and hours worked, total earnings rose 1.2% in April and are now 1.9% higher than they were in February 2020, pre-COVID.  Put it all together and we have a labor market where employers are willing to pay more (higher wages!) and want more workers (more hours!), but are having trouble enticing people to take jobs.  This is a sad situation that is largely a result of government policy.  We think the key factor here is the extra unemployment benefits, which will run through early September, that enable many workers to earn about as much (or more!) by not working as by getting a job.  Notably, the entire increase in the jobless rate in April was due to workers who never went to college, for whom government benefits might be a more attractive alternative.  Given the improvement in the overall economy in reaction to the distribution of vaccines, looser COVID-related rules on economic activity, and policies oriented toward short-term economic growth, look for stronger payroll reports in the months ahead, particularly if other states follow Montana's lead and reject beefed-up unemployment benefits.  In spite of today's report, the US economy is still getting back on its feet.  Removing overly generous government benefits would help it become sturdier even faster.

Click here for a PDF version
Posted on Friday, May 7, 2021 @ 11:05 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.