It's official -- last month's unemployment rate of 4.4% is tied for the lowest unemployment rate we've seen in the past 15 years.
It wasn't a merely-mathematical leap forward either, aided by a sharp drop in the number of people technically counted as part of the workforce. More people are working now. We added a net 211,000 jobs last month, according to the Department of Labor. We've seen higher. Between 2014 and 2016 we occasionally saw reading in excess of 300,000 new payrolls. Compared to the 79,000 new jobs created in March, it was a nice improvement. It's also worth noting that with unemployment only at 4.4% it's difficult to add new jobs; most everyone who wants a job has one. They may not have one they want/like, but they have one.
Be that as it may, there's a distinct 'rest of the story' to Friday's job growth report from the Department of Labor. Most of this additional today underscores the idea that the jobs picture is decidedly improving, even if not as much as some chest-pounders are suggesting.
Perhaps the most telling pieces of information that aren't readily touted by the media are the number of people with jobs, and the number of people without jobs. Amazingly enough, they may or may not mathematically align with the DOL's job growth report (since they're calculated slightly differently).
To that end, the number of employed people grew from 153.0 million to 153.156 million last month.... 156,000 new jobs. Conversely, the number of people officially unemployed fell from 7.202 million to 7.056 million... a difference of 146 million. And, the number of people who aren't technically being counted as unemployed but still actually want a job fell from 5.781 million to 5.707 million.
This data actually puts something of a damper on the stated job growth figure of 211,000 new payrolls.
Also deflating some of the euphoria of today's jobs report is the labor force participation rate. It's been abnormally low since 2013 after cratering between 2008 and 2012, suggesting many had given up altogether on finding employment. To some degree this can be attributed to the retirement of baby-boomers. Most of the weakness here, though, is just a reflection of lackluster job opportunities.
With that as the backdrop, one would have hoped the labor force participation rate improved last month. It didn't. It fell back to 62.9%, remaining stuck in a rut.
Oddly enough, the similar employment/population ratio advanced to a multi-year high of 60.2%, indication that more people (proportionally) living in the United States are working even if more people aren't counting themselves as part of the labor pool.
Though the labor force participation rate and the employment/population ratio don't have to walk hand in hand every step of the way, but they should at least be broadly moving in tandem. The fact that they're not says we can't have a lot of faith in either of the opposing messages they're delivering.
The final arbiter, so to speak, is arguably wage growth. On that front, there's much to celebrate.
Last month, hourly wages grew 0.3%, after growing -- and reversing a lull -- in March. The chart below doesn't show April's average hourly wages yet, but when it does it will mark a second month of strong progress in paychecks. Just as important, the number of hours worked per week is holding relatively steady at 34.4. If it starts to tick higher along with hourly wages, that's when the economy could achieve real escape velocity and drive GDP growth in excess of 3.0%.
In other words, Friday morning's employment report may not be as great as it seemed at first glance. On the other hand, it wasn't so weak that the Federal Reserve has good reason to not go ahead and ratchet up interest rates the next time it has a chance to in June.