Comments on the April Jobs Report

The Bureau of Labor Statistics released the April jobs report last Friday. And the news was not good. Headlines such as “Anticipation of 1 Million New Jobs Dashed” and “April’s Weak Jobs Report Shows Bumpy Times Could Be Ahead” abounded. The reported unemployment rate was 3.5% in February 2020 and is now 6.1%. While that is up substantially, looking over the course of the economic history of the USA 6.1% doesn’t sound too horrible.

Here are two facts that I think are not getting the attention they deserve in the discussion of unemployment and what to do about it. 

Fact #1: The headline unemployment rate only measures people looking for work. It excludes those individuals who have stopped looking for work. Between February 2020 and April 2021, the civilian non-institutionalized population over 16 in the USA rose by 1.5 million people. But the labor force shrank by 3.5 million people. Let that sink in for a moment. Roughly 5 million people stopped looking for work and left the work force as defined by the government.

Population grew 1.5 million

Employed Americans shrank by 7.5 million

Those unemployed (meaning no job but looking for work) grew by 4.1 million

Those who left the workforce grew by 4.9 million

Fact #2: People laid off early in the pandemic are the ones hurting the most – they are the ones who are not being re-hired. 

Prior to the pandemic, only 19% of the unemployed had been off work for more than 26 weeks. According to the April jobs report, 43% of the unemployed have been off work 27 weeks or more. That is 4.2 million people still looking for work after 6 months of unemployment.