The Labor Department released its June Jobs Report which shows that U.S. employers added 224,000 jobs in June, beating analyst expectations. The unemployment rate increased to 3.7% last month. Year-over-year wage growth remained at 3.1%, well ahead of the rate of inflation. U.S. employers have added to payrolls for 105 straight months, extending the longest continuous jobs expansion on record.

The Numbers

224,000: The economy added 224,000 jobs in June.

3.7%: The unemployment rate rose to 3.7%.

3.1%: Wages increased at a rate of 3.1% growth over the last year, the same rate as last month.

The Good

224,000 new jobs were added to the economy adding to the longest continuous job expansion in US history. The unemployment rate increased to 3.7%, but for a positive economic reason, more Americans joined the labor force. Year-over-year earnings remained at a solid 3.1% significantly beating the latest reported inflation rate of 1.8% as measured by the Consumer Price Index (CPI).

June hiring was led by significant gains in the healthcare sector, which added 50,500 jobs, and in transportation and warehousing. The manufacturing sector, which has not seen strong increases for much of the year, added 17,000 jobs last month. Construction firms posted 21,000 new employees in June.

The Bad

Despite the strong gains in June, there is evidence that the rate of job growth is slowing. Employment growth has averaged 172,000 per month so far this year, compared with an average monthly gain of 223,000 in 2018. The broader measure of unemployment and underemployment which includes those who are too discouraged to look for work, plus Americans working in part-time jobs but who want to work full-time, rose to 7.2% in June from 7.1% in May.

The retail sector shed jobs in June as the brick and mortar retail apocalypse continued. As retail businesses shutter, related jobs such as security, warehousing and maintenance may also be adversely impacted in the coming months.

Prime working years are considered to be from the ages of 25 to 54. In June, 79.7% of those in this age group were employed, down from 79.9% in February and well below the record high of 81.9% in April 2000. If this downward trend continues, there may be significant challenges in the nation’s talent supply in the years to come.

The Unknown

The rate of those voluntarily leaving their jobs or “quit rate” has remained unchanged at 2.3% for nearly a year. Even though job openings have eased somewhat, the number of unfilled positions remain near historic highs. While the number of US job openings and the number of unemployed reached its widest gap ever according to reports released last month, employers cannot rely solely on those without work to fill their talent needs.  It is unclear if the rate of workers voluntarily leaving their jobs, presumably for new ones,  will increase in the near future. 

The 28,400 jobs added in April beat some analyst expectations, but the loss of full-time jobs and rise in the unemployment made for a disappointing report. In seasonally adjusted terms, 28,400 new jobs were created, with 34,700 new part-time roles balancing the loss of 6,300 full-time positions. The unemployment rate rose to 5.2%, the highest level in eight months.  

Upside

The Australian economy added 42,300 jobs in May. The labour force participation rate rose to 66.0%, reaching a record high level for the second month in a row. The business confidence index increased to +7, just above the long-term average. Since May 2018, full-time employment increased by 266,300, while part-time employment increased by 93,900.

The largest increase in employment was in New South Wales (up 38,500), followed by Victoria (up 28,600) and Queensland (up 7,800).

Downside

The job growth was almost entirely due to part-time positions. The full-time job increase was just 2,400, much lower than the addition of 39,800 part-time positions. The unemployment rate held steady at 5.2% due to the increase in the participation rate. When the unemployment rate rose in April, it reached its highest level in eight months.

The underemployment rate increased one-tenth of a percentage point to 8.6%. Underemployed workers are defined as part-time workers who want to work more hours than they are and are available to do so as well as full-time workers who worked part-time hours for economic reasons.
 

Even the robust growth in part-time jobs may not be an indicator of continued job increases but a result of the recent national elections:

“CommSec chief economist Craig James said the data covered the federal election period and may account for the skew to part-time workers.

‘Clearly there are temporary jobs created each three years for election-related roles,’ Mr. James said.”

Western Australia had a net job loss of 4,000 and Tasmania had a decrease of 400 positions.

How Long Will the Confidence Last?

While the business confidence index rose in the latest release, business conditions and other key indices were weak clouding the economic outlook:

“’Business confidence saw a post-election spike in May,’ said NAB Group Chief Economist Alan Oster. Interviewing for the survey started on May 20, two days after a federal election saw the Coalition government returned to power.

‘Expectations of rate cuts may also have helped.’

There had been mounting speculation last month that the Reserve Bank of Australia (RBA) would soon cut interest rates, which it duly did at its June 4 policy meeting.

‘While confidence, at least at face value was a positive outcome, business conditions deteriorated further,’ cautioned Oster. ‘Trading conditions and profits are particularly weak.’

The survey’s measure of trading, or sales, slipped 5 points to +3, while profitability fell 4 points to -3. Forward orders also dropped a point to -3.

‘Forward-looking indicators suggest that the bounce in confidence is likely to be short-lived and that conditions are unlikely to turn around any time soon,’ said Oster.”

The June 2019 Labour Market Report released by the Office for National Statistics includes the three months covering February 2019 through April 2019. The unemployment rate held at 3.8%, continuing at a level not seen since 1974. Nominal wage growth was 3.4%. The growth in jobs and wages beat analyst expectations.

Notable Figures

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• The UK employment rate was estimated at 76.1%, higher than a year earlier (75.6%) and the joint-highest on record.
• The UK economic inactivity rate was estimated at 20.8%, lower than a year earlier (21.0%) and close to a record low. This statistic reports the number of people who are economically inactive as a percentage of the total working age population (people aged 16 to 64 years). A person of working age is counted as economically inactive if: they are out of work and have not been actively looking for work in the past 4 weeks.
• The employment level for women was 72.0%, the highest since comparable records began in 1971.

Modest Job Gains Compared to Previous Months

The report showed impressive year-over-year job gains. Estimates for February to April 2019 show 32.75 million people aged 16 years and over working, which is 357,000 more than for a year earlier. This annual increase was due entirely to more people working full-time (up 402,000 on the year to reach 24.15 million). Part-time working showed a fall of 45,000 on the year to reach 8.60 million.
 

The 32,000 job increase in the June report is less than a third of the 99,000 jobs added in the May report. The relatively low number indicates a slow-down in hiring, at least temporarily. It is the lowest number of new jobs since the three months leading to August last year. The reason for the decreased number of new hires may be due to employers having a difficult time hiring new staff in a tight labour market.

Economic uncertainties, primarily driven by Brexit, may be the reason that employers have been on a hiring spree and despite slowing growth rates, the job growth trend may continue as the Financial Times reports:

“In the last three years, the UK labour market has shown resilience, despite a weakness in investment growth.

‘Employment growth has undoubtedly been lifted by businesses preferring to employ rather than commit to investment given current heightened uncertainties,’ said Howard Archer, chief economic adviser at EY ITEM Club, a consultancy. ‘Employment is relatively low cost and easier to reverse if business subsequently stalls,’ he added.”

Healthy Wage Increases

Whatever the cause of low unemployment and continued hiring, the increase in year-over-year nominal wages of 3.4% is a sign that businesses are responding to consistently tightening labour market conditions. In the report released in August 2018 when unemployment was at 4.0%, the year-over-year wage increase was just 2.7%.

While the inflation rate rose to 2.1% in April, the rate of annual wage growth is still well ahead of it. The combination of increased wages and low inflation strengthens the buying power of UK consumers and potentially provides a boost to the overall economy.  This point is underscored by the effect that the rate of increased wages reported impacted the nation’s currency as the pound strengthened in trading as The Express explains:

“This morning’s UK average earnings figures increased in April, exceeding the consensus expectation and rising to 3.4%, providing some uplift to the pound. This will be seen as good news by Sterling investors as rising wages normally translates to increased spending power, which in turn boosts domestic growth.”

Statistics Canada reported that the nation’s unemployment fell to a record low 5.4%. In May, 27,700 jobs were added to the economy, far lower than the 107,000 jobs added in April, but still beating analyst expectations. Weekly annual wage increases were up 2.2%. All of the job gains were in full-time positions and those in the self-employed category, which incorporates freelancers and independent contractors.

The Numbers

27,000: The economy added 27,700 jobs in May.

5.4%: The unemployment rate fell to at 5.4%.

2.2%: Weekly wages increased  2.2% over the last year.

The Good

Statistics Canada reported that the nation’s unemployment fell to 5.4%, a record low. The economy added 27,700 jobs, far ahead of analyst expectations. The job gains in May came from full-time work and from the self-employed category. Over the past year, employment grew by 453,000 or 2.4%, reflecting gains in both full-time (+299,000) and part-time (+154,000) work. This is the biggest year-over-year increase since before the 2008-2009 recession.

Employment in Ontario rose by 21,000 in May, with notable increases among the core-aged population and among women. Three other provinces had net job increases; British Columbia at 17,000, Nova Scotia at 4.500 and New Brunswick at 3,000. There were 20,000 more people working in health care and social assistance in May, bringing year-over-year gains in this industry to 89,000 (+3.7%). Over half of the monthly increase in this sector was in Ontario.

Employment in professional, scientific and technical services was up 17,000, more than offsetting a decline in the previous month. The increase in May was concentrated in Ontario, while smaller increases were also registered in New Brunswick and Saskatchewan. Compared with 12 months earlier, employment in this industry grew by 67,000 (+4.5%). Employment in transportation and warehousing grew by 10,000, driven by increases in Ontario and Alberta. On a year-over-year basis, employment in this sector rose by 60,000 (+5.6%).

The Bad

Despite record low unemployment, the rate of wage growth is still disappointing. In August 2018, annual average weekly wage increases stood at 2.9% while in May it was just 2.2%. Sluggish wage growth impacts the purchasing power of Canadian consumers and can have a negative effect in the overall economy. 

Employment in Newfoundland and Labrador was down 2,700, due to losses in part-time work. The unemployment rate there rose by 0.7 percentage points to 12.4%. The robust job increases in Ontario and British Columbia were not shared by Quebec and other provinces which saw little change in their employment situation.

In May, 19,000 fewer people were working in business, building and other support services, mostly due to declines in Quebec and Alberta. Employment in accommodation and food services was down by 12,400, the fourth decline in the last five months. Employment in this industry has been trending down since May 2018, decreasing by 63,000 (-5.0%) over the year.

The Unknown

The number of self-employed workers rose by 62,000 in May. Compared with 12 months earlier, the number of self-employed rose by 93,000 (+3.3%)  The self-employed category includes independent contractors and freelancers. 

It is unclear why approximately two-thirds of the increase in self-employed workers over the last year took place in May, or whether this rate of growth will continue. Yet if the number of Canadians that opt out of traditional employment situations continues to increase rapidly, it will strain efforts of employers who are attempting to recruit and retain full-time talent at a time of record-low unemployment. The coming months should provide clarity as to whether the rapid increase in self-employed workers in May was an aberration or an indicator of a significant shift in the nature of the Canadian workforce.

The Labor Department released its May jobs report, which shows that U.S. employers added 75,000 jobs in May, well below analyst expectations. The unemployment rate remained at 3.6% last month. Year-over-year wage growth decreased to 3.1%, which is still well ahead of the rate of inflation. U.S. employers have added to payrolls for 104 straight months, extending the longest continuous jobs expansion on record.

The Numbers

75,000: The economy added 75,000 jobs in May.

3.6%: The unemployment remained at 3.6%.

3.1%: Wages increased at a rate of 3.1% over the last year.

The Good

The 75,000 new jobs added to the economy continued the longest job expansion in U.S. history.  The unemployment rate remained at 3.6%, close to a historic low. The year-over-year earnings increase was a solid 3.1%. The annual wage increase one year ago was just 2.7%.

The broadest measure of unemployment—which includes those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time—fell to 7.1% in May from 7.3% in April. This rate, known as the U-6, has descended since peaking at 8.1% at the start of 2019. While hiring appears to be slowing down, the nation still enjoys an economic environment characterized by low unemployment and rising wages. The most recent report on the number of those applying for unemployment benefits showed that new jobless claims are close to a post-recession low.

The Bad

The addition of just 75,000 jobs in May was coupled with revised employment data for April and March which showed a decrease of 75,000 in the numbers previously reported. The fall off in hiring in May is part of a larger trend which indicates that labor market growth is slowing down since last year. In the first five months of 2019, the economy added an average of 164,000 jobs, down from an average gain of 223,000 for all of 2018. The share of Americans working or looking for a job was unchanged, remaining at 62.8%.

Manufacturers added only 3,000 workers to their payrolls, continuing a streak of weak hiring numbers for this sector. The retail sector, which is challenged by the rise of e-commerce, lost jobs for the fourth month in a row. The retail sector has lost 50,000 jobs since January. The proportion of prime working-age adults, those 25 to 54, who are working rose sharply in 2018. This proportion appears to be leveling off or even decreasing. It was 79.9% in February and 79.7% in May. 

Some analysts point to tensions and uncertainty over trade as a possible cause of disappointing jobs report:

“It definitely looks like we’ve downshifted in the pace of job growth,” said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. “Overall it’s a disheartening report particularly since you may have some trade effects there, but a lot of the trade tensions escalated” since the reference period for the Labor Department’s surveys in the middle of the month.”

The Unknown

With possible tariffs on Mexican goods and continuing trade tension with China, many U.S. businesses are compelled to make hiring decisions without much certainty over future costs, both in the near and long term. In part fueled by trade conditions, there appears to be increasing pessimism over the potential for economic growth for the remainder of the year:

“Over all, the economy is on a fragile footing,” said Lindsey Piegza, chief economist at the investment bank Stifel. “We’re still talking about solid growth at the start of the year but that’s in the rearview mirror. The name of the game is uncertainty.”

The 28,400 jobs added in April beat some analyst expectations, but the loss of full-time jobs and rise in the unemployment rate made for a disappointing report.

The Numbers

28,400: The Australian economy added 28,400 jobs in April.

5.2%: The Australian unemployment rate rose to 5.2%.

65.8%: Labour force participation rose to 65.8%.

0: The Business Confident Index fell to 0 from our last update in the latest NAB release.

Upside

The Australian economy added 28,400 jobs in April, beating analyst expectations. The labour force participation rate rose to 65.8%, a record high showing broad confidence in the nation’s job market. Since April 2018, full-time employment increased by 248,100 and part-time employment increased by 74,800.

States with job growth include New South Wales (up 25,100), followed by Western Australia (up 6,400) and Queensland (up 5,400).

Downside

The job growth was entirely due to part-time positions. The 34,700 new part-time roles balanced the loss of 6,300 full-time jobs. The unemployment rate rose to 5.2%, the highest level in eight months.  Victoria had a net job loss of 7,600. The nation’s youth unemployment – people aged between 15 and 24, rose 0.1 points higher to 11.8%.

Another troubling indicator is the increase in the underutilisation rate which went from 13.3% to 13.7% in one month. Underutilisation includes unemployed Australians and those working who want to work more.

The data released in the report, coupled with the news that online job ads have fallen to six-year lows have led some analysts, including RBC’s Richard Thompson, to assert that the unemployment rate is not likely to fall any time soon:

“Given the suite of lead employment/vacancy indicators mostly suggesting further softening in labour market conditions ahead, it is difficult to imagine that unemployment will get back below the 5% mark.”

Fall in Online Job Ads – A Negative Indicator?

Business Insider Australia reports that job advertisements placed on employment platform SEEK fell 8.9% annually in April. Postings fell in all job categories and in all states except the Australian Capital Territory. Ads in media, trades, construction, real estate and architecture fell more than 20% over the year. Job ads in 15 categories fell more than 10%. The article notes, “if the data is reflective of a broader demand for workers, it isn’t looking good for anyone seeking employment in the second half of the year.”

A decrease in online job postings does not necessarily indicate a softening job market. In May 2018, online job ads decreased by 51,000 in the U.S. when the unemployment rate stood at 3.8%. Nearly one year later, in April 2019, it was 3.6%. A decrease in the number of online job postings may reflect, at least in part, that enterprises are successfully utilizing creative strategies to attract talent beyond traditional job boards.

The May 2019 Labour Market Report released by the Office for National Statistics which covers the first quarter of 2019. The unemployment rate dropped to 3.8%, its lowest level since 1974. In that period, 99,000 jobs were added to the UK economy, which was lower than some analysts had projected. Nominal wages rose by 3.3% over the year.

The Numbers

The UK employment rate was estimated at 76.1%, which is higher than the previous year (75.6%) and tied for the highest figure on record.

Estimates for the first quarter of 2019 show 32.70 million employed people who are 16-years-old and over, which is 354,000 more than for a year earlier. This increase is due entirely to an increase in full-time workers. Part-time workers decreased by 18,000 on the year to reach 8.59 million.

The UK unemployment rate was estimated at 3.8%; it has not been lower since October to December 1974.

The UK economic inactivity rate was estimated at 20.8%, lower than a year earlier (21.1%) and close to a record low. Economic inactivity measures people without a job but who are not classed as unemployed because they have not been actively seeking work within the last four weeks and/or they are unable to start work within the next two weeks.

For February to April 2019, there were an estimated 846,000 vacancies in the UK, 28,000 more than a year earlier. Job vacancies are reported on a different schedule than most of the other labour market figures.

Solid Job Numbers, but Lower Than Expected

The addition of nearly 100,000 jobs to the economy is good news by any standard. Yet many economists were expecting even greater increases, and there was speculation about the slowing rate of growth for both jobs and wages. Uncertainty over Brexit is still lurking in the background, as Reuters reports:

“The jobs boom may well reflect how employers have opted to take on workers – who can be laid off quickly during a downturn – rather than commit to longer-term investments while they wait for uncertainty over the conditions of Britain’s departure from the European Union to lift.”

Trouble Ahead?

The idea that employers are choosing to hire expendable workers rather than make long-term capital investments does not suggest confidence in the nation’s economic outlook. Some economists quoted in the Financial Times found some of the data from the May report to be a cause for concern:

“’Britain’s job market continues to defy wider economic uncertainty,’ said Stephen Clarke, senior economic analyst at the Resolution Foundation…

The number of jobs added in the first three months to March was below expectations and lower than the number added in the three months to February. While the number of self-employed increased, the number of full-time employees dropped by 55,000 compared with the previous quarter.

‘Some tentative early warning signs suggest that the jobs market is entering a turbulent period,’ warned James Smith, an economist at ING.

Surprising Growth in the Number of EU Workers

The first quarter of 2019 may well be remembered as a time when Brexit was the dominant topic in every part of the country. Workers for EU countries residing in the UK faced an uncertain future as the original Brexit date loomed. Last year, the ONS reported significant numbers of EU workers leaving the UK in a trend that was nicknamed “Brexodus.”

Yet during this same time, the number of EU nationals working in the UK reached a record high. Nearly 2.4 million citizens of other EU countries now work in the UK, an increase of more than 100,000 compared to the final three months of 2018.

For employers, unexpected shifts such as the reversal of Brexodus underscore the need for expertise in attracting and retaining talent in the uncertain months ahead.

Statistics Canada reported that the nation’s unemployment fell to 5.7% and that 107,000 jobs were gained after shedding jobs in March. This is the biggest one month increase with records going back to 1976. The record job growth beat market expectations of an addition of just 12,000 jobs or less. Canada added 426,400 jobs over the past 12 months, up 2.3%, which is the largest one-year increase since 2007 before the Great Recession. In the last two years, the economy has added 700,000 jobs.

The Numbers

107,000: The economy added 107,000 jobs in April.

5.7%: The unemployment rate fell to 5.7%.

2.1%: Weekly wages increased 2.1% over the last year.

The Good

Employment increased in Ontario, Quebec, Alberta and Prince Edward Island. Several important sectors posted positive job numbers including wholesale and retail trade; construction; information, culture and recreation; public administration; and agriculture. The employment situation improved for some key demographic groups as well. There were job increases for youth aged 15 to 24, people aged 55 and older and women in the core working ages of 25 to 54.

In a hopeful sign for the economy, youth employment accounted for much of the gains in jobs in April, as unemployment for those aged 15 to 24 hit its lowest rate in 43 years. The Labour Force Survey reported that youth unemployment rate fell to 10.3% with jobs for Canada’s younger workers growing by 89,000 over the past year. The rate has not been that low since Statistics Canada starting using its current statistical criteria in 1976.

While the annual wage growth numbers are still not strong compared to other advanced economies, there are some signs of progress. While annual weekly wages decreased from last month, annual hourly wage gains increased to 2.5% in April, the fastest annual gain since September and up from 2.4% in March. Pay increases for permanent employees jumped to 2.6%, the largest increase since August.

The jobs report was welcomed by some analysts as a sign that employers are demonstrating confidence in the Canadian economy:

“’Nearly every indicator of quality came in strong this month: The best-ever gain came with solid full-time job growth, all in employees — rather than self-employed — more Canadians were drawn into labour markets and wages were up,’ said Brian DePratto, senior economist for TD Economics, in a written statement about the results.

‘Chalk this one up as a solid message that employers still have faith in the Canadian economy.’”

The Bad

While the report contained good news for much of Canada’s workforce, not every sector, province or demographic group fared well. Employment decreased in professional, scientific and technical services and in New Brunswick. The employment gains for the remaining provinces were negligible compared to Ontario, Quebec, Alberta and Prince Edward Island.

Contrasting with the vote of confidence that some have interpreted from the April report, some leading economists have recently expressed modest expectations for Canada’s economic growth this year:

“Deloitte’s latest economic advisory report projects a year of slower economic growth, a weak Canadian dollar, and a vulnerable economy. Though the dreaded “R-word” (recession) remains a possibility, the consultancy projects modest growth of 1.3% in 2019 and 1.5% in 2020 for Canada.

After posting strong growth of 3% in 2017, the Canadian economy slowed to 1.8% in 2018, and has little momentum heading into this year. Factors such as a drop in residential investment, weaker consumer spending, and a decelerating US economy are projected to moderate growth to 1.3% in 2019, according to Deloitte Canada.

Though the firm says a recession isn’t the most likely outcome, slowed economic growth does make Canada more vulnerable to risks like protectionism, Brexit, and low global interest rates.”

The Unknown

The validity of the data in the April report and the conclusions drawn by many economists was questioned on the day the report was released in Bloomberg:

“A loss of 7,200 jobs in March, and then a gain of 106,500 jobs in April. For David Rosenberg, Canada’s latest employment data just doesn’t add up.

Statistics Canada said Friday that Canadian employment increased by 106,500 positions in April, the biggest one-month increase in data going back to 1976. The country’s jobless rate fell to 5.7%, compared to 5.85 in March.

But Rosenberg, chief economist and strategist at Gluskin Sheff + Associates, says the country’s latest jobs numbers are hard to believe, given what’s happening in the Canadian economy.

‘Did you really believe that the Canadian labour market is so volatile that we could have a [7,200] decline in the labour force in one month, followed by a 100,000-increase in the next month? Is our labour market more volatile than the stock market is? It’s hard to believe,’ Rosenberg said in an interview with BNN Bloomberg Friday.

‘Somehow we’re creating record jobs and in the same survey in the United States, they’re losing jobs in a significant way. So what I’m trying to say is, calm down a little bit. There’s no way that the Canadian economy is nearly as strong as this number would lead you to suggest.’

Rosenberg took issue with a few details in StatsCan’s labour force survey, pointing to how most of the job gains were concentrated among youth, and in sectors such as construction and retail.

‘I thought we were battling a housing bubble in this country,’ Rosenberg said. ‘Meanwhile, we know that consumers are going on the debt treadmill and doing more to repair their balance sheets than head out to the shopping malls.’

Rosenberg, who has been known for his bearish views on Bay Street, questioned any cheering of the April labour figures.

‘It’s like you’re a teacher in high school and your dumbest student just handed in an ‘A’ report and you just don’t really know what to do with it,’ Rosenberg said. ‘I don’t give it an ‘A’ by the way.’”

The Labor Department released its April jobs report which shows that U.S. employers added 263,000 jobs in March, beating analyst expectations. The unemployment rate fell to 3.6 percent last month. Year-over-year wage growth remained at 3.2 percent, which is well ahead of the rate of inflation. U.S. employers have added to payrolls for 103 straight months, extending the longest continuous jobs expansion on record.

The Numbers

263,000: The economy added 263,000 jobs in April.

3.6%: The unemployment rate fell to 3.8%.

3.2%: Wages increased at a rate of 3.2% growth over the last year.

The Good

The U.S. economy demonstrated its resilience with the strong April Jobs report. After shedding jobs in March, manufacturing had a modest rebound adding 4,000 positions while other key economic sectors had impressive gains. Leisure and hospitality added 34,000 positions, education and health services increased by 62,000 jobs and business and professional services jobs grew by 76,000.

The jobs report was generally greeted with enthusiasm by analysts who tempered their responses with caveats about the meaning of the data as in this reporting by Bloomberg.

“It’s clearly telling you this economy is still chugging along very nicely,” Torsten Slok, chief economist at Deutsche Bank Securities, said on Bloomberg Television. “It is inflationary in the sense that wages did go up but they didn’t go up as much as we had expected. Goldilocks is the best description of this,” Slok said.

The surprising overall robustness – which didn’t reflect any surge in temporary hires for the 2020 Census, as some analysts had flagged – follows months of broad labor market strength. While the expansion is poised to become the nation’s longest on record at midyear, economists expect a deceleration this year even after a strong first quarter.

The New York Times noted that the elements of the strong job market have defied conventional economic expectations and could assuage fears of an economic downturn.

“Not that long ago, the overwhelming consensus among economists would have been that you couldn’t have a 3.6% unemployment rate without also seeing the rate of job creation slowing (where are new workers going to come from with so few out of work, after all?) and having an inflation surge (a worker shortage should mean employers bidding up wages, right?).

And yet that is what has happened, with the April employment numbers putting an exclamation point on the trend. The jobless rate receded to its lowest level in five decades. Employers also added 263,000 jobs; the job creation estimates of previous months were revised up; and average hourly earnings continued to rise at a steady rate — up 3.2 percent over the last year…

In particular, it now appears that recession fears that emerged at the end of 2018 were misguided — especially once the Fed backed off its campaign of rate increases at the start of 2019.”

The Bad

The participation rate, those who are working or want to work, decreased in April. The broadest measure of unemployment, which includes part-time workers who want to work full-time has remained virtually unchanged since February. Despite a strong job market and rising wages, some Americans are opting out of the workforce and those who want to more fully participate have not been able to do so.

The April report also showed that the robust job market has not impacted two categories of potential talent over the last year. In April, 1.4 million persons were marginally attached to the labor force, little different from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 454,000 discouraged workers in April, basically unchanged from a year earlier. Discouraged workers are those not currently looking for work because they believe no jobs are available for them.

The Unknown

Jobs in the retail sector decreased by 12,000 in April and by over 49,000 in the last year. The extensive closing of retail locations has come to be known as the “retail apocalypse.” The number of store closings so far in 2019 is already larger than in all of 2018 as Business Insider reports:

“The retail apocalypse is raging on with almost 6,000 store closings announced so far in 2019 — more than the entirety of last year. According to a new report from Coresight Research, U.S. retailers have announced 5,994 store closings this year, compared with 5,864 store closings in all of 2018…Coresight Research CEO Deborah Weinswig predicted that this trend would continue. “The flood of store closures will likely continue for quite some time,” she said. An April UBS report predicted that 75,000 stores would close across North America from this year to 2026. It said e-commerce would make up a quarter of total retail sales by then.”

Retail workers affected by store closings can bring employers important transferrable skills such as customer service and inventory tracking. It remains to be seen how many of these workers will stay in the broad retail sector, including e-commerce, or be attracted into other sectors which can leverage their skills and experience.