US | Nonfarm payroll employment up by 115,000 and the unemployment rate at 8.1%

Nonfarm payroll employment rose by 115,000 in April, and the unemployment rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics reported today.

Employment increased in professional and business services, retail trade, and health care, but declined in transportation and warehousing…

Source:

via Employment Situation Summary.

Why Did the Unemployment Rate Drop?

The U.S. unemployment rate dropped to 8.1% in April but a broader measure was unchanged at 14.5% and a separate survey noted that the economy added a paltry 115,000. Why the drop?

This month, the decline in the jobless rate wasn’t a positive sign, as it primarily came from people dropping out of the labor force. The unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force. When the unemployed no longer count as part of the labor force, both numbers decline and the unemployment rate falls.

In April, the number of unemployed dropped by 173,000, but so did the number of people employed — by 169,000. That indicates that those people didn’t necessarily find new jobs, since the overall labor force declined by 342,000…

Source:

Read More @ Why Did the Unemployment Rate Drop? – Real Time Economics – WSJ.