Interpreting the April 2021 Jobs Report
Introduction: With vaccination rates increasing and the Coronavirus's daily spread at the lowest levels in months (Rattner), many Covid-related restrictions have been relaxed, thus leading to increased economic optimism (Bartash). On Friday, the Bureau of Labor Statistics (a division of the Department of Labor) released their monthly employment report, something that has received significant attention since (Cox). Today's post will be brief, providing an overview of the report's main findings, and discussion of the results for socio-economic policy. Note that I will not go over every data finding and result from the report, but will focus on the major ones, and significant sub-level results that are significant or otherwise stand out.
Overview into the April 2021 Jobs Report:
- Change in Jobs: Probably one of the most-watched metrics, the report estimated that around 266,000 net jobs (excluding the agricultural sector) were added to the job market in April 2021 ("The Employment Report," 1).
- Labor Force Participation: As a quick back-to-basics economics lesson, the unemployment rate is a percentage of those in the labor force, who are defined as those either working ("employed") or unemployed and actively looking for work (Majaski). Out of the eligible labor force population, around 61% of the American population is currently in the labor force, equal to around 156 million Americans. There is little change in the labor force participation rate, which has hovered around 61% since December as well ("The Employment Report," 13).
- Unemployment Rate: The estimated unemployment rate in April 2021 was 6.1%, which represents almost no change from the previous month, and minimal change from December 2020, when the unemployment rate was around 6.5% ("The Employment Report," 1). Out of the total labor force, this equates to around 9.8 million Americans out-of-work who are seeking employment ("The Employment Report," 13).
- Out of Labor Force: In addition to those in the labor force (unemployed or employed), there is another segment of the American population who is eligible to work and is interested, had searched for work in the last year, but are currently not seeking work (per BLS guidelines, within the last 4 weeks). Per the April report, an estimated 1.9 million workers currently fall into this category, an increase of 419,000 over March. Finally, an estimated 565,000 Americans are considered "discouraged workers," or those claiming that no employment opportunities exist for them, which also increased over the last month ("The Employment Report," 2).
- Part-Time Employment: Defined as employment less than 34 hours a week in the United States ("The Employment Report," 21), around 25 million Americans worked part-time in April 2021 (including this article's author). Out of that total, only around 5 million worked part-time for economic reasons, while the vast majority worked part-time for noneconomic reasons (i.e. not because of unfavorable workforce and economic conditions). Compared with March 2021, the number of Americans working part-time for economic reasons declined, while those working part-time for non-economic reasons increased. All of these statistics generally hold true when adjusting for whether one works in an agricultural-related job ("The Employment Report," 21).
- Significant Sector-Level Changes: When looking at sector-level employment data, one of the most striking was a significant increase (331,000 new jobs) in hospitality and leisure jobs, which includes restaurants, recreational facilities, and gambling facilities ("The Employment Report," 2). Other than that sector, other sectors did not see significant changes in employment, and some saw decreases. For example, educational services-related jobs saw a slight decline relative to last month, and have yet to bounce back from the massive decline last year. Meanwhile, employment agencies and "temporary help services" have seen gradual declines in total employment, especially relative to the situation one year ago. Finally, at all levels of government (excluding local-level education jobs), total employment remained relatively stagnant despite increasing over the total one year ago. Local-level education jobs are an exception as employment in that sector increased over March ("The Employment Report," 31-33).
External Implications and Analysis:
- Debates over Unemployment Benefits: In the last week, especially with the release of the jobs report, intense partisan debate has ensued over ongoing pandemic-related unemployment benefits. In particular, business groups have expressed concern that the supplemental $300/week unemployment benefits has discouraged unemployed Americans from seeking work (Franck and Schwartz). At the state-level, several states have decreased or seek to decrease such benefits as a means to incentivize unemployed workers to find employment (Iacauri; Luhby). Opponents of these actions have argued that even with increased economic optimism, for the unemployed, searching for work takes time and resources that unemployment benefits can cover (Luhby). Finally, economic analysis has shown that the Coronavirus-caused recession is far different than previous recessions, such as some workers having to recover from the disease, children being stuck at home, and thus requiring parental supervision (discussed further below), low wages in many sectors discouraging workers from applying, and the virus still being a widespread problem (Iacauri).
- Continuing Pandemic Closures and Restrictions: While many sectors of the American economy have been reopening, the sector-level results detailed above show how different sectors are bouncing back as the economy reopens. In particular, the massive increase in the hospitality and leisure sector likely reflects expectations for a rebound in tourism and travel this summer as a result of repealed travel restrictions (Kwok). Meanwhile, the slight uptick in education-related jobs is probably a reflection of schools slowly transitioning back to in-person instruction, although like other sectors, the breadth of school reopenings is still low because the vaccine is not yet available for Americans under age 16 (Egan and Strikler; Map: Where"). Finally, the declines in employment agencies and "temporary help agencies," along with public-sector courier and messenger services, could be a reflection on overall economic optimism, with more workers seeking out employment opportunities on their own.
- Stagnant Labor Force Participation Rate: As noted above, the labor force participation rate of the total eligible population has remained relatively constant since January, even with increased economic optimism. There are several potential reasons for this. First, as discussed previously on this blog, the pandemic has likely exacerbated the retirement of "Baby Boomers" out of the workforce, many of whom may find it difficult to find new employment if they retire or are laid off (Novack). Second, as explained above, with many primary and secondary schools still not offering in-person or significant in-person instruction, some parents (especially women) have been forced to continue staying home to watch over their children. In conjunction with this, the high cost of child care combined with the pandemic's effects on child care facilities and economic strains have made this situation difficult for parents in this situation. Finally, general concern over the ongoing virus, despite the recent decline in new cases, could be keeping some workers wary of re-entering the labor force at the moment (Iacauri).
Works Cited:
Bartash, Jeffrey. "Small businesses grow more optimistic after states lift restrictions — but hiring is a big problem." MarketWatch, 13 Apr. 2021, www.marketwatch.com/story/small-businesses-grow-more-optimistic-after-states-lift-restrictions-but-hiring-is-a-big-problem-11618259877. Accessed 8 May 2021.
Cox, Jeff. "April’s expected hiring boom goes bust as nonfarm payroll gain falls well short of estimates." CNBC, 7 May 2021, www.cnbc.com/2021/05/07/jobs-report-april-2021.html. Accessed 8 May 2021.
Davidson, Paul. "Major business group calls for ending $300 federal bonus in unemployment checks, blaming it for weak April job gains." USA Today, 7 May 2021, www.usatoday.com/story/money/2021/05/07/unemployment-check-chamber-commerce-wants-end-300-federal-perk/4990742001/. Accessed 8 May 2021.
Egan, Lauren, and Laura Strickler. "FDA preparing to authorize Pfizer Covid vaccine for 12- to 15-year-olds as early as next week." NBC News, 4 May 2021. Accessed 9 May 2021.
Franck, Thomas, Brian Schwartz. "U.S. Chamber of Commerce blames weak jobs report on enhanced unemployment benefit, kicks off lobbying effort." CNBC News, 7 May 2021, www.cnbc.com/2021/05/07/us-chamber-of-commerce-rips-300-jobless-benefit-calls-for-repeal.html. Accessed 8 May 2021.
Iacurci, Greg. "Montana, South Carolina to kick people off jobless benefits even as unemployment rises." CNBC, 7 May 2021, www.cnbc.com/2021/05/07/montana-south-carolina-ending-participation-in-fed-unemployment-programs.html. Accessed 8 May 2021.
Kwok, Linchi. "Will the Hospitality and Travel Industry Recover in 2021?" hospitalitynet, 18 Feb. 2021, www.hospitalitynet.org/opinion/4103064.html#:~:text=According%20to%20AHLA's%20report%2C%20hotel,from%20%24167%20billion%20in%202019. Accessed 8 May 2021.
Luhby, Tami. "Want to keep unemployment benefits? Many states are again requiring a job search." CNN, 7 Apr. 2021, www.cnn.com/2021/04/07/politics/unemployment-job-search-requirement/index.html. Accessed 8 May 2021.
Majaski, Christina. "Participation Rate vs. Unemployment Rate: What's the Difference?" Investopedia, 27 Jan. 2021, www.investopedia.com/ask/answers/061515/what-key-difference-between-participation-rate-and-unemployment-rate.asp#:~:text=The%20key%20difference%20between%20the,is%20currently%20without%20a%20job. Accessed 9 May 2021.
"Map: Where Are Schools Required to Be Open?" Education Week, 7 May 2021, www.edweek.org/leadership/map-where-are-schools-closed/2020/07. Accessed 8 May 2021.
Novack, Janet. "8 Ways Coronavirus Will Drastically Alter Boomer Retirements." Forbes, 16 Mar. 2020, www.forbes.com/sites/janetnovack/2020/03/16/8-ways-coronavirus-will-drastically-alter-boomer-retirements/?sh=53f7ad0c3474. Accessed 8 May 2021.
Rattner, Nate. "U.S. vaccination pace slides further from peak levels as Covid case counts decline in most states." CNBC, 29 Apr. 2021, www.cnbc.com/2021/04/29/covid-19-cases-deaths-vaccinations-daily-update.html. Accessed 8 May 2021.
"The Employment Situation - April 2021." United States Bureau of Labor Statistics, 7 May 2021, www.bls.gov/news.release/pdf/empsit.pdf. Accessed 8 May 2021.
"Useful Definitions." Economic Policy Institute, www.epi.org/newsroom/useful_definitions/. Accessed 8 May 2021.
