Labor force participation rate returns to January 2022 level.
The economy added 428,000 jobs in April, while the unemployment rate remained flat at 3.6 percent. The unemployment rates for white workers (3.2 percent), Blacks (5.9 percent), Asians (3.1 percent), and Hispanics (4.1 percent) were all virtually unchanged from the previous month.
Labor Force Participation Gains Slowed, Still Approaching Pre-Pandemic Levels
The overall labor force participation rate (LFPR) declined 0.2 percentage points to 62.2 percent, returning to the January 2022 level. This marks the first time since May 2021 that the LFPR has experienced a month-over-month decline. For prime age (25 to 54) workers, the LFPR is still below their 2019 average, while for workers ages 55 to 64, the LFPR is now 0.1 percentage point above their 2019 average.
The LFPR for prime age men remained flat 88.7 percent, while for prime age women it ticked down 0.3 percentage points to 76.2 percent. The LFPRs for prime age men and prime age women are now half a percentage point below their respective pre-pandemic levels.
For those ages 55 to 64, the LFPR for men ticked down 0.2 percentage point to 71.3 percent; it rose by the same amount for women in this age range, and is now at 59.9 percent. The LFPR for men ages 55 to 64 still lags the pre-pandemic level, while the rate for women is now 0.2 percentage point higher than their Feb 2020 LFPR.
There are 586,000 still out of the labor force due to the pandemic, including 63,000 prime age men and 165,000 prime age women. There are also 124,000 parents with children under 18 who cited the COVID-19 pandemic as their reason for being out of the labor force. The share of parents who cite the pandemic as their reason for being out of the labor force is twice the size of non-parents who say the same.
Wage Growth Showing Signs of Moderation
Significant wage growth over the last year has been important in offsetting the pace of inflation for workers. Growth has been especially prominent for workers at the lower end of the wage distribution over the last two years. However, more moderate overall wage growth will be expected if inflation is going to return to more palatable levels.
Overall wage growth showed signs of slowing this month. The average hourly wage was up 5.5 percent year-over-year, but increased at a 4.4 percent annual rate when comparing the last three months (February-April) with the prior three months (November-January).
The rate of slowing was even sharper for production and nonsupervisory workers in leisure and hospitality, a relatively low-paying industry group. The year-over-year increase in average hourly earnings in this group was 12.6 percent, while the annual rate when comparing the last three months with the prior three months was 8.4 percent.
Share of Unemployment Due to Voluntary Quits
The share of unemployment due to people who voluntarily quit their jobs is often used as a proxy for labor market strength. It implies people are confident that they can secure employment quickly after leaving their current job. By contrast, declines in the share of voluntary quits can indicate that the labor market is beginning to weaken. The share of job leavers increased by just 0.1 percentage points between March and April of 2022, and now stands at 13.1 percent.
While these data can be erratic, the month-to-month consistency suggests that the tight labor market may be on the verge of becoming less so. The steadiness of the voluntary quit rate is also important when considering the slowing wage growth mentioned above. In a weaker labor market, employers will be under less pressure to increase wages in order to compete for workers.
The number of childcare workers continued to grow, with the industry adding 2,700 workers between March and April. But this is a smaller increase than any other month in 2022, and the childcare workforce remains 116,200 workers short of its pre-pandemic size (February 2020). It is important that the childcare workforce continue to grow, given the industry’s importance to women’s labor force participation (which ticked down slightly this month).
Leisure and hospitality added 78,000 jobs, including 43,800 jobs in food services and drinking places. The month-over-month growth in both of these groups was smaller between April and March of 2022 than between February and March of 2022. Food services and drinking places are also still just under 800,000 jobs short of their pre-pandemic level.
The number of jobs in motion pictures and sound recording industries fell by 5,700 this month. It is still up by 82,200 compared to April 2021, but 16,400 short of its pre-pandemic level. This industry group is notable for having the largest private sector increase in union membership between 2019 and 2021, so it will be interesting to see how the fluctuations in job growth affect union density.
Employment Uptick Among People with Disabilities
The United States has made progress toward removing barriers to employment among people with disabilities since the signing of the Americans with Disabilities Act in 1990, but employment levels among people with disabilities remain far below those of their non-disabled counterparts. Lately, the pace of these strides has shown signs of picking up. Employment among people with disabilities grew by 40,000 this month, while the LFPR stayed flat. At 23.1 percent, this LFPR is just slightly more than a third of the non-disabled rate.
The employment-to-population ratio (EPOP) for people with disabilities increased by 0.1 percentage points to 21.2 percent between March and April of 2022. This is the second highest ever recorded level, and represents a 2.8 year-over-year percentage point gain. However, it is still less than a third of the non-disabled EPOP.
The unemployment rate for people with disabilities declined by 0.5 percentage points to 8.3 percent in April 2022. The rate is more than 2.5 times higher than for those without disabilities.