Despite Slight Drop in Unemployment Rate, Labor Market Continued to Slow in April 2012
Labor market data for April 2012 mark the second consecutive month of discouraging and below expectation employment conditions. For the US, annual job growth, seasonally adjusted, was 1.4 percent and 1.82 million jobs or 115,000 jobs per month in April (p) 2012 compared to 1.2 percent and 1.5 million jobs or 251,000 jobs per month in April 2011. See table 1 below for the results for some major markets.
On a seasonally adjusted basis, monthly nonfarm payroll employment rose by 115,000 in April, and the unemployment rate, at 8.1 percent, changed little from March 2012. There was an upward revision to March job gain from 120,000 to 154,000 jobs and February job gain from 240,000 to 259,000 jobs gained. Despite the upward revisions, March and April employment numbers remain far from the 200,000 plus gains seen throughout winter months this year. The warmer-than-usual winter months this year may have shifted some of the spring job gains to the earlier winter months. Given the deceleration of in employment growth in March and April 2012, it is expected to see a similar trend through 2Q12.
Over the prior 4 months, nonfarm job growth had averaged 201,000 per month. Since a recent low point in February 2010, payroll employment has risen by 3.75 million. In April 2012, employment rose in professional and business services by 62,000 jobs, which is growth of 1.5 million jobs since a recent low point in September 2009. Retail trade employment reversed trend from March and rose by 29,000 jobs in April. Healthcare continued to add jobs last month as the industry added 19,000 jobs. Within leisure and hospitality, employment in food services and drinking places continued to trend up by 20,000 jobs in April, which is up 576,000 jobs gained since the low point in February 2010. Manufacturing employment continued to trend up by 16,000 jobs as well. Transportation and warehousing lost 17,000 jobs in April, with employment declines in transit and ground passenger transportation by 11,000 jobs and in couriers and messengers by 7,000 jobs.
The unemployment rate declined slightly to 8.1 percent but reflected a decline in the labor force. The participation rate dropped to 63.6 percent, the lowest since December 1981. Looking at labor force flows, the movement seems to be from unemployment out of the labor force, particularly given the modest decline in those unemployed longer than 27 weeks. Though over the year, the number of long-term unemployed has fallen by 759,000, it remained elevated at 5.1 million in April. These individuals made up 41.3 percent of the unemployed. If we count discouraged workers and part-time workers looking for full-time employment (U6 series), the unemployment rate remains high at 14.5 percent.
Table 1. Annual Rates of Job Gain and Growth by Market (MSA; Source: US Census Bureau)
Most major markets show positive annual job growth in April. Top 5 annual job producers during April 2012 are Houston (+81,200), New York (+70,700), Phoenix (+36,500), Chicago (+36,100) and Dallas (+35,700), whereas Cleveland, Augusta, Little Rock, Detroit and St. Louis lost jobs during April 2012 and rank at the bottom of the list. Most markets are slowly recovering; however, most markets are still below their pre-recession level total employment as shown in the chart below.
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 715,000. This is 7.0 percent below the revised March rate of 769,000 but it is 23.7 percent above the April 2011 estimate of 578,000. Single-family authorizations in April were at a rate of 475,000; this is 1.9 percent above the revised March figure of 466,000. Authorizations of units in multifamily buildings were at a rate of 217,000 in April; this is 22.8 percent below the March 2012 and 32.8 percent growth from April 2012.
The multifamily permitting trends for the same markets above are shown below. The permit numbers by metropolitan area below are as of March 2012 since the April data will be released on May 25th.
Table 2. Annual Multifamily Permitting Trends (Source: US Census Bureau)
Table 3: Annual Multi-Family Permits by Permit Issuing Place (Source: US Census Bureau)