The total number of seasonally adjusted (SA), non-farm people employed in the US in April 2017 was 146,063,000. This figure increased by 253,000 jobs on a three month moving average (3MMA) and by 2,330,000 year on year. The month on month figure was easily beat the average job creation over the past year which was 144,900 jobs per month. The year on year increase of 1.55% was within 0.2 points of where it has been over the past 6 months.
Figure 1 shows the history of the total number of US workers employed in red on the left axis and the monthly change in blue on the right axis. Employment level reached a low point of 129.73 million (M), in March 2010. Since that time the economy has created 16.33 M jobs to reach the current record high level of 146.06 M.
The labor force participation rate is calculated by dividing the number of people actively participating in the labor force by the total number of people eligible to participate in the labor force. You then multiply the resulting quotient by 100 to get the percentage. Figure 2 shows s chart of the labor participation rate from 1980 to present. The ratio remains stubbornly low at 62.9%, a level not seen since the late 1970’s. The baby boomers which are now retiring in large numbers is contributing to the decline in the labor force participation rate. An addition factor was the vast number of workers displaced by the depths of the great recession which sidelined millions whom eventually gave up looking. The recent rise in the labor-force participation rate is indicating a tightening labor market as people who were previously discouraged from looking for work move back into the labor market.
In its April 11th news release the Bureau of Labor Statistics Job Openings and Labor Turnover (JOLT), reported that there were 5.7 million job openings. This number was little changed from its previous two reports. The number of hires was essentially unchanged at 5.3 million in February. The hires rate was 3.6%. There were 5.1 million total separations in February, little changed from January. The total separations rate in February was 3.5%. The number of quits was essentially unchanged at 3.1 million in February. The quits rate was 2.1%. There were 1.6 million layoffs and discharges in February, little changed from January. The layoffs and discharges rate was 1.1% in February. Over the 12 months ending in February, hires totaled 63.0 million and separations totaled 60.6 million, yielding a net employment gain of 2.4 million. These totals include workers who may have been hired and separated more than once during the year.
At Gerdau, we keep a keen eye on the employment numbers, especially manufacturing and construction since this is where most long product steel ends-up. In addition we know that growth in net job creation correlates to increased steel consumption.