Where The April Jobs Were: It Was All About Minimum Wage Again

zerohedge.com / by Tyler Durden / May 5, 2017 9:57 AM

April was a month of economic recovery: after a disappointing March, jobs rebounded strongly last month, rising from a downward revised 79K to 211K, providing some validation to Yellen’s claim that the recent economic weakness was transitory. And yet, wages once again disappointed, with annual hourly earning growth declining to 2.5% from 2.7%.

How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to another post-recession low of 4.4%, wages simply can not rise?

The answer was once again to be found in the quality of jobs added, because despite the poor headline payrolls print in March, the quality of jobs added that month was actually quite better than recent trends. This is where April disappointed: according to the BLS, the bulk of jobs added were once again in low or minimum-wage sectors such as leisure and hospitality, which added +55,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +26,000. Another low-paying sector – education and health – added 41,000 jobs in April.

Surprisingly, of the 39K professional and business services – traditionally a well-paying job category – for the second month in a row employees providing “services to buildings and dwellings”, aka “doormen” dominated the category, with 9.9K jobs added.

Looking at retail workers, recall that one of the main reasons for the big March jobs drop was a plunge in retail (also minimum wage) employment, which saw over 27K jobs losses last month, and another 29K in February. That has now reversed, and in April 6,300 retail workers were added.

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