Is April Jobs Report ‘Pure Fiction, A Lie’: Gain Of 223,000, 5.4% Unemployment?

Americans seeking full- and part-time work fill out job applications at a workshop. (Photo: REUTERS)

The Labor Department Friday said the U.S. economy added 223,000 jobs in April and the unemployment rate dropped to 5.4 percent, just below expectations for 224,000. However, while some are touting the report as evidence the labor market slowdown last month was temporary setback, others point to the oft-ignored data that just won’t improve.

“Weak wage growth remained the fly in the ointment of the labor market report, albeit with signs that pay pressures are gradually picking up, with average hourly earnings up 2.2% on a year ago,” Chris Williamson, chief economist at research firm Markit said.

Previous job gains were also revised downward, an unwelcome but barely covered development that is beginning to look like a trend. In March, just 85,000 new jobs were created, most which came from the low-paying and part-time sectors.

Incorporating the revisions for February and March, which reduced nonfarm employment by 39,000, on net, monthly job gains have averaged 191,000 over the past 3 months,” said Bureau of Labor Statistics (BLS) Commissioner Erica L. Groshen.

“Well, the idea that America is in the midst of a great recovery is pure fiction. It’s a lie,” Las Vegas resort mogul Steve Wynn said in an interview this week. “It’s a jobless recovery because recoveries are marked by the amount of real employment. And if you count the people who have left the workforce, real unemployment is 15- to 20-percent. If you take real inflation, and you’ve got to count energy and food and all that stuff, inflation is much higher than they say it is.”

In fact, wages rose by just three cents per hour — representing only 0.1 percent — which represents a near-zero change from a month earlier. The labor force participation rate — which has remained at a 37-year-low range from 62.7 percent to 62.9 percent since April 2014 — was also up by just 0.1 percent at 62.8 percent.

Wynn isn’t the only notable labor market power-player outright casting doubt on the validity of the Labor Department’s jobs reports. Gallup Chair and CEO Jim Clifton said recently that the unemployment rate measured and reported by the Labor Department “amounts to a big lie.”

“There’s no other way to say this,” said Clifton. “The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a big lie.”

Clifton later back-peddled from his statements during an interview with CNBC when he stated that he was worried he might “suddenly disappear” and not make it home that evening after telling the truth about unemployment in America.

Further, among those employed in April, a whopping 6.6 million remained part time for economic reasons. These Americans claim they want full-time work, but simply cannot find it. In April, 2.1 million people were neither working or looking for work because they did not believe a job in the labor market was available to them, and 756,000 were marginally attached to the work force. Neither of these numbers, the latter of which want to work and were searching, have changed at all over the last 12 months.

The headline BLS numbers stand in stark contrast to the ADP National Employment Report released earlier this week.

“April job gains came in under 200,000 for the second straight month,” said Carlos Rodriguez, president and chief executive officer of ADP. “Companies with 500 or more employees had the slowest growth.”

However, the ADP report also found troubling news for wage growth, as the sectors of the economy that provide higher-paying jobs continue to show lackluster performance. Manufacturing shed 10,000 jobs in April after losing 3,000 the month prior, while goods-producing employment declined by 1,000 jobs in April, down from 3,000 jobs gained in March.