Job growth rocketed higher in April, adding 263,000 new jobs for the month, according to the Bureau of Labor Statistics, while the unemployment rate fell to 3.6%, an historic low not seen since December 1969.
According to the New York Times, payrolls have now risen for 104 consecutive quarters, and the economy has created more than 20 million jobs since the Great Recession ended in 2009.
In April, notable jobs gains occurred in professional and business services, construction, healthcare and social assistance.
Construction employment rose by 33,000, professional and business services by 76,000, and education and health services by 62,000. Weak spots included growth of only 4,000 jobs in manufacturing and a loss of 12,000 jobs in retail.
Among the major worker groups, the unemployment rates declined in April for adult men (3.4%), adult women (3.1%), whites (3.1%), Asians (2.2%), Hispanics (4.2%) and blacks (6.7%).
On Wednesday, Federal Reserve Chairman Jerome H. Powell, said, “Our outlook, and my outlook, is a positive one, is a healthy one, for the U.S. economy for the rest of this year.”
While the headline numbers look exceptionally bright, there is a dark side lurking beneath that nobody reports about. The Labor Force Participation Rate—a measure of an economy’s active labor force—excludes those who have dropped out of the job search.
The unemployment rate does not count people who have left the workforce entirely or are underemployed. The number of people not in the labor force grew by 646,000 to a staggering high of 96.2 million.
This number would be even greater, were it not for the emerging gig economy. This new type of so-called employment leads to a gross distortion in the otherwise bright-looking report. A large number of jobs are actually gig, contract and temp work.
It’s been a mystery as to why the record-high employment rate is not causing wages to rise. I’m not an economist, but I know that if there are fewer unemployed people available and full employment, salaries should rise as companies would need to pay more to attract and keep talent. The April job report indicates a pitiful nominal increase in workers’ wages.