Saturday, May 9, 2015

April 2015 Employment Change

The Bureau of Labor Statistics publishes employment changes on the first Friday of each month (link)—for the previous month. Employment in April increased by 223,000. A lower number had been anticipated, hence sighs of relief came yesterday. 2015, however, is not looking all that energetic. If the economy’s performance January through April is projected for the entire year, the results indicate that employment growth in 2015 will be lower than in 2013 and 2014. Such an outcome is not very likely, but it does show that something significant has changed since the Great Recession. When economies begin to produce patterns similar to the annual seasons—now better, now worse—the safe presumption is that something is missing; in this case it is public belief that things are destined, always, to get better: unlimited growth, in other words. Public confidence.

Herewith the two graphics that show monthly data from December 2007 forward and annual results for 2007 through 2014 (actual) and for 2015 (projection):

If we examine how April’s employment gains were distributed, we note the following: The numerically largest increase in employment came in the two largest sectors, Professional and Business Services and Education and Health Services (62,000 and 61,000 jobs respectively). Construction, a relatively small sector, gained significant number of new jobs—45,000. Two sectors (Mining and Logging and Wholesale Trade) lost employment (-15,000 and -4,500 respectively). The other sectors all had small gains. The continuing and persistent trend is an increase in private sector services, including private education.  In terms of total size, Government, which represents 15.5 percent of total employment (all those public sector teachers) only gained 10,000 jobs; in effect it lost share of total employment again in April. The tax cutters ought to be rejoicing; those who long for Big Picture improvements ought to mourn.

Speaking of share of total employment, nine sectors lost share, including Mining and Logging, Manufacturing, the Trades, Information, Financial Services, Leisure and Hospitality, and Other Services; the biggest loser was Government. Utilities were unchanged. The share shifts are tiny, but the cumulative picture is not that of an economy in uniform growth but one growing because an aging population is exerting a new demand (Health Care and Social Assistance) and because industry is more and more into management (Professional and Business Services) rather than actually making or delivering goods.