U.S. Economy Adds Far Fewer Jobs Than Expected, Labor Force Participation Falls

Unemployed Americans wait in line for to fill out applications for jobless benefits. (Photo: Reuters)

The Labor Department reported the unemployment rate held steady at 5.0% and the U.S. economy added 160,000 jobs in April, far below the median forecast for 202,000 jobs. Meanwhile, wages continued to increase at an abysmal pace and the labor force participation rate fell to 62.8% from 63.0%.

Under the heavy burden of government regulation, mining employment continued its now years-long trend of decline in April by shedding -7,000 more jobs. Worth noting, the coal miner union in West Virginia endorsed Donald J. Trump for president on Thursday, marking the first time in five elections they have not chosen the Democratic candidate. Since reaching a peak in September 2014, employment in mining has decreased by a whopping 191,000 jobs, with more than three-quarters of the loss in support activities for mining.

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, leisure and hospitality, and government, showed little or no change over the month.

Subgroups for American workers remained largely unchanged this month. The unemployment rate for Hispanics increased to 6.1% in April, while the rates for adult men (4.6%), adult women (4.5%), teenagers (16.0%), Whites (4.3%), Blacks (8.8%), and Asians (3.8%) showed little or no improvement.

The Labor Department this week continued to boast the lowest number of first-time unemployment benefits weekly in decades. However, as PPD repeatedly explains, the number of long-term unemployed workers– or, those jobless for 27 weeks or more–impacts the sheer number of eligible applicants. While the long-term unemployed number declined by 150,000 in April, it still remained at a whopping 2.1 million in April.

These individuals accounted for a staggering 25.7% of the total 5.0% designated as unemployed. Further, the number of American workers employed part time for economic reasons, also referred to as involuntary part-time workers, remained flat in April at 6.0 million. This has shown little to no improvement since November. These American workers either would have preferred full-time employment, were working part time because their hours had been cut back or were unable to find a full-time job.

In April, the labor force participation rate decreased to 62.8%, marking a 37-year low. The less-cited but arguably more important employment-population ratio also fell to an abysmal 59.7%. Coupled with flat wages, the report is the latest in a string of economic data suggesting a slowdown in the U.S. economy and a loosening in the labor market.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours in April. The manufacturing workweek, plaqued by regional contraction, remained unchanged at 40.7 hours. Overtime was also unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was up by 0.1 hour to 33.7 hours.