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Unemployment rate steady at 5 percent
The U.S. economy added 160,000 jobs in April 2016, dampening expectations that the labor market could match the robust gains of the previous two months.
The payroll counts for February and March were also revised down, however. The jobs gain for March was lowered from a hearty 215,000 to 208,000, still a solid number. The February count was revised to 233,000 jobs, down from a strong 245,000. Over the prior 12 months, employment growth had averaged 232,000 per month.
Despite the lower number for April, “Today’s job growth figures indicate continued strength in the labor market,” said Andrew Chamberlain, chief economist for Glassdoor. “To keep the employment rate steady, the labor market only needs to add about 100,000 new jobs per month. The average pace of job growth over the past three months has been 200,000 new jobs added, a solid showing during a time of stock market volatility and slow growth overseas.”
The strongest April job gains were in professional and business services (65,000 jobs), health care (38,200 jobs), and leisure and hospitality (22,000 jobs). The weakest sectors were government (-11,000 jobs), mining and logging (-8,000 jobs), and retail (-3,100 jobs).
Kenneth Esch, a Chicago-based partner at PricewaterhouseCoopers, noted that although a majority of private companies said they’re planning to increase head count, fewer plan to hire in the next 12 months. That slowdown in hiring is consistent with what the Society for Human Resource Management (SHRM) has been seeing with its Leading Indicators of National Employment (LINE) report recently.
Jennifer Schramm, SHRM-SCP, manager of workforce trends at SHRM, said the question economists are asking is if this is the beginning of a trend or is only temporary. “Many seem to think that it may not be a blip because employers are being more cautious about adding to headcount,” she said.
“Given this context, we should expect companies to hire very cautiously over the next year,” Esch said. “Highly targeted hiring practices continue to be a trend that is holding steady, as the majority of companies continue to hire highly skilled workers in almost every industry, including manufacturing.”
Wage Growth Still Troubling
In April, average hourly earnings for all private-sector employees increased by 8 cents to $25.53, following an increase of 6 cents in March. Over the year, average hourly earnings have risen by 2.5 percent. “That’s a slight improvement from the roughly 2.2-2.3 percent growth of recent months, but still well below the 3-4 percent growth of normal times,” Chamberlain said.
Schramm added that hard-to-fill jobs are still hard to find qualified candidates for and that will influence compensation offerings, at least for those types of jobs.
About 7.9 million Americans are considered unemployed by the government and the unemployment rate held at 5 percent.
Among demographic groups, the unemployment rate for Hispanics increased to 6.1 percent in April, while the rates for adult men (4.6 percent), adult women (4.5 percent), teenagers (16.0 percent), whites (4.3 percent), blacks (8.8 percent) and Asians (3.8 percent) showed little or no change.
The employment-population ratio edged down to 59.7 percent in April, and the closely watched labor force participation rate’s recent upward trend ended, falling 0.2 percentage points in April to 62.8 percent.
The recent upward trend was unusual, Chamberlain said. “As the Baby Boomers continue to retire and young workers stay in school longer, we expect this downward trend to continue over the next decade, regardless of short-term shifts in the business cycle.”
Roy Maurer is an online editor/manager for SHRM.
Follow him @SHRMRoy
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