Healthcare leads the economy in job growth as manufacturing and construction continue to bleed.
April saw the U.S. unemployment rate fall ever so slightly to five percent, a statistically insignificant decline. The number of unemployed people in the month hit 7.6 million. From April 2007, that number increased by 800,000, and the unemployment rate has risen by 0.5 percentage points. Total non-farm payroll shed 20,000 jobs last month, which is slightly better than the pre-employment report consensus of a loss of 75,000.
In total, private-sector employment lost 29,000 jobs in April, while the public sector gained 9,000 jobs (the latter is in line with my analysis from earlier in the year, which suggested that public-sector employment could continue to outperform private-sector employment for some time to come).
Despite job losses extending to a fourth straight month in April, there are opportunities out there. The economy continues to show high demand for the highly skilled and educated portion of the market. Unemployment for college graduates continues to hover around two percent, less than half the national average and almost one-third the unemployment rate for those who have only a high school diploma.
It’s clear there are gains in the economy. Among the positive areas are:
- Professional Services: accounting up 9,100; architecture and engineering up 1,100; computer systems design up 10,200; and legal up 1,700.
- Healthcare: healthcare and social assistance up 43,300; ambulatory healthcare services up 21,700; hospitals up 9,400; and nursing and residential care facilities up 5,800.
- Financial Services: finance and insurance up 4,600; credit intermediation and related activities down 1,600; depository credit intermediation up 2,800;
- commercial banking up 1,100; securities, commodity contracts, and investments up 2,200; real estate down 1,100; rental and leasing services up 1,400; and lessors of non-financial intangible assets down 2,500.
The positive sub-sector highlights only underscore the weakness in other areas like construction (which lost 61,000 jobs in April and a total of 457,000 jobs since its peak in September 2006) and manufacturing (loss of 46,000 jobs in April due largely to motor vehicles and parts and 326,000 jobs in the past 12 months).
Overall, there could be cautious optimism in the U.S. economy with only 20,000 jobs lost in April. I believe that U.S. employers simply don’t have as many jobs to cut because they didn’t add many during the last recovery. Job creation never reached pre-2001 levels after the recession in what was called at the time a “jobless recovery.”
What Should Employers Do?
Going into the second and third quarters of this year, employers should identify their top talent and work hard to retain them. Provide front-line managers with the tools they need to give assurance and incentives to the talent you want to retain. When the economy and labor market slow, people begin to develop insecurity about their jobs and start thinking about other options.