Economists Predict April's Jobless Rate Will Remain Steady
DAVID GREENE, HOST:
This morning we are delving into the latest jobs numbers which came out a short while ago. The Labor Department said 165,000 jobs were added in the month of April, and that is slightly better than expected. The unemployment rate, meanwhile, decreased a bit to seven and a half percent. That's the lowest since December of 2008. NPR's Yuki Noguchi has been digging into these numbers, and she joins us now. Hey, Yuki.
YUKI NOGUCHI, BYLINE: Good morning, David.
GREENE: So, is this report better than we anticipated?
NOGUCHI: Better than a lot of people anticipated, actually. The big surprise, though, came in the form of revisions to the previous two months. Hiring in February and March was substantially better than initially reported. In fact, February was quite strong, that month the economy added 332,000 jobs. And if you take out some aberrations of temporary hiring and so on, that turns out to have been the best monthly job growth in seven and a half years. So, I think the story we've been telling shifts slightly, as a result of this report, for the better.
GREENE: OK, now we say, for people, don't follow this that closely, the Labor Department will sometimes go back and revise the numbers from previous months. And if things are better than we thought, for February, March, we have a report...
NOGUCHI: Yeah. They get more data and they update the figure.
GREENE: Is this a different story now, for the beginning of 2013, I mean, the economy's looking better than we have been talking about?
NOGUCHI: Yeah, that's right, I mean, although there's another way to look at it, which is that things were much better a couple of months ago and job creation in April apparently fell back, closer to the norm of what we had been seeing.
GREENE: Ah, so the revised numbers might mean the story for April is not as great as (unintelligible).
NOGUCHI: Well, you know, if you look at the numbers, it's about, you know, half or less than a half of what it was in February, so, you know, there's two ways to look at this, but the expectations have been declining and - and we did still beat expectations for April.
GREENE: So we had been anticipating some potentially bad news about hiring, and thinking that hiring might have stalled as a result of the big sequestration, these automatic federal spending cuts. Are we getting a sense for how much of an effect the sequestration's having?
NOGUCHI: Well, it's not appearing to have that big of an effect yet. You know, market watchers feared that, a little bit, in this report. We did see average hours worked decline a bit. People worked fewer hours and logged less overtime. And that may, in part, reflect that government workers are starting to get furloughed. But it is a little early to pass judgment on the sequester, yet. I mean, economists believe we won't see the effects of the cuts crest until the summer, maybe into the fall. Still, I think what's safe to say is that this report suggests private hiring is still fairly decent, heading into what we think are going to be bigger bumps in the road, just ahead of us. I mean, the flip side of that statement is that if you didn't have the cuts, some economists say we would be adding 50,000 more jobs per month.
GREENE: Hmm. Well, Yuki, let me ask you about something that we talked about last month. The unemployment ticked down in the last jobs report, but you said it wasn't necessarily good news, it could actually be a bad sign because people were actually dropping out of the labor force - not looking for jobs anymore. We see the unemployment rate come down again, now, is that still the phenomenon we're seeing?
NOGUCHI: The opposite, actually, the labor force did not shrink and the number of people who are employed, grew. And the number of long term unemployed, which, you know, has been a major, major issue, declined by a quarter of a million people. So, contrast that to the previous month - which you were talking about - when we saw half a million people drop out of the labor force, probably because they were discouraged. This seems to be a much more promising sign.
GREENE: An unemployment rate ticking down that might actually be some good news for the economy. If jobs are being added, right now, where are they being added?
NOGUCHI: All of them are added in the private sector, government employment has been declining, and did so again in April, slightly. One area that surprise me was actually retail. Retail grew last month, and has been growing. We've been talking about furloughs, spending cuts, and it was expected that that would affect retail, but in fact, retail added jobs. So have leisure and hospitality industries. So if people are cutting back on spending, it's not yet manifesting here. Professional and business services added the most jobs, and healthcare, of course, which steadily has been adding jobs, also added jobs.
GREENE: All right. We've been talking to NPR's Yuki Naguchi, about the latest jobs report, out this morning. The unemployment rate has decreased to its lowest level since the December 2008. Yuki, thanks a lot.
NOGUCHI: Thank you.