Economic Snapshot: Year-over-year unemployment declines continue

Unemployment continues its declines this month, albeit at a slow pace. Job openings also continue to increase year-over-year, which is a good sign for the labor market, and small business optimism is coming back after a rough start at the beginning of 2015.

Employment situation

Total nonfarm payroll employment increased by 223,000 in April and the unemployment rate was essentially unchanged at 5.4 percent. The number of unemployed persons was essentially unchanged in April at 8.5 million.

Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.8 percentage points and 1.1 million, respectively.

Job gains occurred in professional and business services, health care and construction.

The number of long-term unemployed was little changed at 2.5 million and accounted for 29 percent of the unemployed. Over the past year, the number of long-term unemployed has decreased by 888,000. The number of persons employed part time for economic reasons was little changed at 6.6 million but is down by 880,000 from the previous year.

In April, average hourly earning for all employees on private nonfarm payrolls rose 3 cents to $24.87. Over the past 12 months, average hourly earning increased by 2.2 percent.

JOLTS

There were 5.0 million job openings on the last business day of March, little changed from 5.1 million in February. The job openings rate for March was 3.4 percent.

The number of job openings increased over the 12 months ending in March for total nonfarm, private and government and increased YOY in all four regions.

There were 5.1 million hires in March, little changed from February, and the hires rate was 3.6 percent. Over the 12 months ending in March, the number of hires increased for total nonfarm and private and was little changed for government.

There were 5.0 million separations in March, virtually unchanged from February, and the separations rate was 3.5 percent. Within separations, there were 2.8 million quits in March and the quits rate was 2.0 percent. The number of quits increased over the 12 months ending in March for total nonfarm, private and government as well as in the Northeast, Midwest and West regions.

Small business optimism 

The NFIB Small Business Optimism Survey rose 1.7 points from March to 96.9, remaining below the January reading of 100.4 when the index was at its highest level since October 2006.

The only negative change in the index this month came from expectations for real sales to be higher, which dropped three points to 10 percent.

Earnings trends posted an unexpected 6-point gain with a reading of negative 16 percent. Reports of increased labor compensation rose 1 point to a net 23 percent of all owners.

The net percent of small business owners reporting inventory reductions rose 3 points to a net negative 1 percent. The percent of owners viewing current inventory stocks as “too low” increased 4 points to a net negative 1 percent. Those planning to add inventory rose 3 points to 4 percent.

Fifty-three percent of owners reported hiring or trying to hire, up 3 points, but 44 percent reported few or no qualified applicants for the positions they were trying to fill. Twenty-seven percent of all owners reported job openings they could not fill in the current period, up 2 points from March.

A net 11 percent of small business owners plan to create new jobs, up 1 point.