April jobs report: more of the same

The April jobs report was weaker than expected (160K vs. 200K), but from a big-picture perspective it was no different than what we've been seeing for the past several years. Private sector jobs—the ones that count—have been growing a little more than 2% per year since mid-2011. Add some meager productivity to that number, and it's reasonable to assume that the economy is still growing at a 2 - 2 ½% annual pace. In other words, the weakest recovery in modern times continues.

As the charts above show, April's "weak" jobs growth was par for the course. The jobs number is naturally volatile from month to month. So it's best to look at the change over several months or even a year. On a year over year basis, private sector jobs rose 2.2%; over the past six months, they are up at a 2.1% rate, which is about what they have averaged since mid-2011. Nothing much has changed.

What has changed is the growth of the labor force, which has picked up of late. That explains why the unemployment rate has stopped declining: on the margin, more people are deciding they want to work. This is a positive development.

It's also encouraging that the growth of public sector jobs has on balance been zero for almost 10 years. The physical size of the public sector has been shrinking relative to the private sector, and that makes it easier for private initiative to take root.

In any event, what this means is that the weak GDP growth numbers of the past two quarters are an anomaly that should be reversed via higher numbers over the remainder of this year.