Strength in April Office Employment Masks Softening Report Overall

Economic Pulse
May 6, 2016
Download PDF


Heidi Learner

Heidi Learner

Chief Economist

SUMMARY: Nonfarm payroll employment rose by 160,000 in April, with net revisions to January’s and February’s figures subtracting 19,000 workers. While the household unemployment rate remained at 5.0%, the participation rate fell back slightly to 62.8%. The average workweek lengthened by 0.1 hours, while average hourly earnings rose by 0.3% MoM and 2.5% YoY, just below the peak annual level of earnings growth observed in December 2015 (2.6% YoY).

Office employment in April rose by a robust 85,000—20,000 more than the average observed over the last 12 months (Table 1 and Chart 1). In particular, management/technical consulting and computer systems design each added an above-average number of workers (+20,600 and +7,300, respectively) while the 20,000 increase in financial activities employment matched the highest monthly gain over the past four years.

Nonetheless, the overall report was somewhat weaker than expected; total private sector employment growth over the past three months has slowed to 577,000—well off the 842,000 gain in the three months through December 2015. As shown on Chart 2, productivity growth (growth in output per worker hour) has also decelerated. From March 2011 through today, year-over-year growth in private sector payrolls has been at or above 1%; during this period, quarterly year-over-year productivity gains have averaged 0.5%. However, during the last period of comparable gains in payrolls (Q2 2004 – Q3 2007), productivity gains averaged a significantly higher 1.7%. Without seeing increasing gains in output per worker, employers may find themselves challenged to keep adding workers at their current pace, particularly in an environment where forecasted earnings growth has slowed so dramatically.

Table 1. Monthly Change in Office-Using Payrolls by Category (000s, SA)

Monthly Change in Office-Using Payrolls by Category (000s, SA)

Chart 1. Office-Using Employment and Total Payrolls, April 2008 – April 2016 (Seasonally-Adjusted, 000s)

Office-Using Employment and Total Payrolls, April 2008 – April 2016 (Seasonally-Adjusted, 000s)

Chart 2. Nonfarm Business Productivity and Private Employment, YoY Percentage Change

hart 2. Nonfarm Business Productivity and Private Employment, YoY  Percentage Change

Heidi Learner

Heidi Learner

Ms. Learner analyzes the macroeconomic and legislative environment affecting commercial real estate markets on a national and regional basis and develops real-time measures of supply and demand for commercial space.