Are Jobs Rebounding?

A look at job creation in April.

The U.S. economy created 223,000 jobs in April, according to the Bureau of Labor Statistics on Friday. That represents a bounce back from March, which in fact was revised downward in the latest report to a miserable net gain of 85,000 jobs. The April increase was about as much as economists and other observers had been expecting, though less than the terrific rate seen in late 2014. Besides being a critical consideration in the formulation of interest-rate policy, the number of jobs created has a direct bearing on the health of commercial and residential real estate: not enough for too long, and everybody suffers.

Job gains for the month were fairly specific, occurring in professional and business services, health care and construction, and not so much in other industries. “Mining employment,” in which the BLS also includes oil and gas extraction, continued to decline. The increase in construction employment also represented a rebound. Employment in construction rose by 45,000 in April, after changing little in March. Over the past 12 months, construction has added a net of 280,000 jobs. In April, job growth in the sector was concentrated in specialty trade contractors, with employment gains about evenly split between the residential and nonresidential components.

In a separate survey, the BLS reported that in April both the unemployment rate (5.4 percent) and the number of unemployed persons (8.5 million) were more-or-less unchanged. Over the last 12 month, the unemployment rate and the number of unemployed persons were down by 0.8 percentage points (from 6.2 percent a year ago) and 1.1 million, respectively. The bureau’s U-6 measurement, however, edged down to 10.8 percent in April, compared with 10.9 percent in March and 12.3 percent a year ago. U-6 tracks not only the conventionally unemployed, but also everyone marginally attached to the labor force (people who aren’t actively looking for work, but who still could be employed), plus total employed part time for economic reasons.

The BLS also recently reported that wages and other compensation for workers edged up recently, increasing 2.6 percent for the 12-month period ending March 2015, compared with a 1.8 percent increase for the 12 months before March 2014. Not a vast increase, but better than before, since a persistent missing piece of the recovery has been increasing wages and salaries.  It’s still unclear whether all this recent data, including both the jobs bounce and the uptick in pay, is going to be enough to persuade the Federal Reserve to raise interest rates in the near or medium term.