WASHINGTON (5/5/14)--The U.S. economy landed 288,000 new jobs in April, while unemployment fell to 6.3%, according to the Labor Department, but additional trends in the market cloud the job picture still (Economy.com May 2).
While payroll employment gains shattered analyst expectations for the month, adding 78,000 more jobs than a Moody's consensus, the type of jobs being added may be worth noting.
Moody's analysts said the gains in April were broad-based across industries--the strongest numbers came in construction, professional/business services, education/healthcare and retail--but others have reported that the trends over the last year point to less growth in higher-paying jobs, and stronger growth in the low-wage sector.
"Among 13 industries that make up total U.S. private-sector employment, the five with the lowest nominal average weekly earnings represented about 52% of private-sector employment gains over the past year," said MarketWatch's Ruth Mantell, citing numbers from Friday's jobs report.
Meanwhile, belying the substantial 0.4% drop in unemployment in April down to 6.3%, the government reported Friday that 806,000 people had dropped out of the work force entirely, pulling down the unemployment rate considerably as the rate doesn't account for those who have stopped looking for work.
"The sharp drop in joblessness must therefore be taken with a pinch of salt, as the cast of unemployed did not necessarily (not) find work. They may have simply stopped looking," said Andrew Wilkinson of Interactive Brokers in a Friday MarketWatch roundup of reactions to the job data. "Proving the case is the drop in the participation rate to 62.8% from 63.2%."
The labor force participation rate, which matches a 35-year low, is the lowest since the start of the recovery, Moody's reported.