Unemployment Rate Holds Steady at 3.6 Percent
May 6, 2022 – Employment rose by 428,000 in February as the U.S. unemployment rate was unchanged at 3.6 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was essentially unchanged at 5.9 million. These measures are little different from their values in February 2020 (3.5 percent and 5.7 million, respectively), prior to the COVID-19 pandemic. Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.2 percent), teenagers (10.2 percent), Whites (3.2 percent), Blacks (5.9 percent), Asians (3.1 percent), and Hispanics (4.1 percent) showed little or no change over the month. Among the unemployed, the number of permanent job losers remained at 1.4 million in April, and the number of persons on temporary layoff was little changed at 853,000. These measures are little different from their values in February 2020. In April, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.5 million. This measure is 362,000 higher than in February 2020. The long-term unemployed accounted for 25.2 percent of all unemployed persons in April.
Total nonfarm payroll employment rose by 428,000 in April. Job gains were widespread, with the largest gains occurring in leisure and hospitality, in manufacturing, and in transportation and warehousing. However, nonfarm employment is down by 1.2 million, or 0.8 percent, from its pre-pandemic level in February 2020.
“Almost 500,000 workers decided to leave the workforce in April. The large decline is a concerning prospect for businesses that are facing one of the tightest labor markets in decades,” Peter Essele, head of portfolio management for Commonwealth Financial Network, said in an email Friday morning. “Currently, there are 11.5 million job openings and only 5.9 million unemployed, causing a large mismatch in labor supply and demand that’s fueling wage growth. A further decline in the participate rate could exacerbate the labor supply shortage, resulting in further wage pressures that will inevitably flow through to broad-based inflation.”
Wages also climbed yet again, albeit at a slower monthly and annual pace compared to March. On a month-over-month basis, average hourly earnings increased by 0.3 percent, slowing from March’s upwardly revised 0.5 percent increase. And on a year-over-year basis, average hourly earnings were up 5.5 percent.
Fed chair Jerome Powell expressed optimism that the moves would succeed in addressing some of the demand-side factors contributing to inflation and that, combined with some easing in supply-side constraints, these would help put a cap on rising prices.
“Wages are running high, the highest they’ve run in quite some time. And they are one good example … of how tight the labor market really is,” Mr. Powell said during his press conference Wednesday. “The fact that wages are running at the highest level in many decades. And that’s because of an imbalance between supply and demand in the labor market.”
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“So we think through our policies, through further healing in the labor market, higher rates, for example of vacancy filling and things like that, and more people coming back in we’d like to think that supply and demand will come back into balance,” he added. “And that, therefore, wage inflation will moderate to still high levels of wage increases, but ones that are more consistent with two percent inflation. That’s our expectation.”
Where Job Growth Occurred
- Employment in leisure and hospitality increased by 78,000 in April. Job growth continued in food services and drinking places (+44,000) and accommodation (+22,000). Employment in leisure and hospitality is down by 1.4 million, or 8.5 percent, since February 2020.
- Manufacturing added 55,000 jobs in April. Employment in durable goods rose by 31,000, with gains in transportation equipment (+14,000) and machinery (+7,000). Nondurable goods added 24,000 jobs, with job growth in food manufacturing (+8,000) and plastics and rubber products (+6,000). Since February 2020, manufacturing employment is down by 56,000, or 0.4 percent.
Related: Job Cut Plans are Rising Amid Inflationary Risks
- Employment in transportation and warehousing rose by 52,000 in April. Within the industry, job gains occurred in warehousing and storage (+17,000), couriers and messengers (+15,000), truck transportation (+13,000), and air transportation (+4,000). Employment in transportation and warehousing is 674,000 above its February 2020 level, led by strong growth in warehousing and storage (+467,000) and in couriers and messengers (+259,000).
- In April, employment in professional and business services continued to trend up (+41,000). Since February 2020, employment in the industry is up by 738,000.
- Financial activities added 35,000 jobs in April, led by a gain in insurance carriers and related activities (+20,000). Employment also rose in non-depository credit intermediation (+6,000) and in securities, commodity contracts, and investments (+5,000). Employment in financial activities is 71,000 higher than in February 2020.
- Healthcare employment rose by 34,000 in April, reflecting a gain in ambulatory healthcare services (+28,000). Employment in healthcare is down by 250,000, or 1.5 percent, since February 2020.
- Employment in retail trade increased by 29,000 in April. Job gains in food and beverage stores (+24,000) and general merchandise stores (+12,000) were partially offset by losses in building material and garden supply stores (-16,000) and health and personal care stores (-9,000). Retail trade employment is 284,000 above its level in February 2020.
- In April, wholesale trade employment rose by 22,000. Employment in the industry is down by 57,000, or 1.0 percent, since February 2020.
- Mining added 9,000 jobs in April, with a gain in oil and gas extraction (+5,000). Mining employment is 73,000 higher than a recent low in February 2021.
- Employment showed little change over the month in other major industries, including construction, information, other services, and government.
Related: Major Paradigm Shifts Coming Out of the Coronavirus Crisis
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
