April employment

Calculated Risk reminds us of the big picture: as far as employment is concerned, this recession dwarfs all others since the Great Depression and the recovery has been considerably weaker than the recoveries from other deep recessions.



April's Employment Situation report seems like a mixed bag. Good news: payroll employment rose by 244,000, way above what forecasters were expecting. The BLS revised February and March's estimates upward by 41,000 in February and 5,000 in March.

Bad news: the unemployment rate rose from 8.8% to 9.0%. Had this occurred because of an increase in the labor force (discouraged workers returning to the job search) there'd be no problem. However, according to the household survey employment fell by 190,000 and the number unemployed rose by 205,000, for a net labor force gain of only 15,000. The employment-population ratio actually fell a bit from 58.5% to 58.4%. In April 2010 it was 58.7% - so this number has actually been drifting down for a year. That's not good at all.

In other news, remember that 3.0% GDP forecast I made a couple of weeks ago? Admitting no special knowledge of anything, I simply added growth a reasonable guess for productivity growth to growth in hours between 2010Q4 and 2011Q1. Well, the BLS has reported its estimates of productivity for 2011Q1 and shows that hours rose by 1.4%, productivity rose by 1.6%, and therefore nonfarm business output rose by 3.1%. Bullseye! (In the same sense that Aaron Rodgers can pump his fist in the air when he underthrows Donald Driver but the ball hits Greg Jennings right in the numbers by accident.)

I don't know why the BLS numbers on nonfarm business output differ from the BEA's numbers for GDP. I don't think changes in the growth of the government sector are big enough to explain the difference. The BLS figure shows 4.4% growth in 2010Q4 versus a GDP growth rate of 3.1%, and a growth rate for 2010 overall of 3.7% versus a GDP growth rate of 2.8%.