Higher than anticipated job gains occurred in April, with the economy adding 288,000 jobs, which marked the strongest month for job growth in two years -- much higher than economists’ forecasts. In addition, the unemployment rate fell to 6.3%, down from 6.7% in March and reached its lowest level since September 2008. Part of the April job performance may be attributed to the backlog of hires delayed by winter weather. Economists are also quick to point out several surges in hiring by businesses since the start of 2010, only to be followed by a decline to lower levels.
On an encouraging note, the job recovery now appears to be broad-based across many industries. One of the high performing sectors is professional and business services, which added 75,000 jobs in April. The industry has added more than 660,000 jobs during the last year. Employment in the temporary services industry continued to climb, adding 24,000 jobs. Retail trade, food services and drinking places both grew steadily, gaining 35,000 and 33,000 jobs, respectively. Construction employment also grew by 32,000, with job growth in heavy and civil engineering construction (+11,000) and residential building (+7,000). Finally, the health care sector also increased by 19,000 in April, in line with the prior 12-month average gain of 17,000 per month.
Temporary Help Continues Strong Growth Trend
April marked yet another month of robust job growth within the temporary help services sector. The industry added 24,000 to reach a record 2,855,500. This represents growth of 0.8 percent from the previous month, and a 9.3 percent increase from one year ago.
Further, the temporary help service’s market share – meaning its portion of all jobs – reached another record high of 2.07 percent.
The future also looks bright for the staffing sector, according to a recent report by the Labor Department. The number of jobs in the employment services industry is projected to increase from more than 3.1 million in 2012 to almost 4.0 million in 2022. The increase of 781,700 jobs, at an annual rate of 2.2 percent, makes this industry one of the largest and fastest growing in terms of employment.
U.S. Services and Non-Manufacturing Sector Reaches Six-Month High
Production and new orders increased sharply last month, resulting in a strong expansion of the U.S. service sector and other non-manufacturing companies. The Institute for Supply Management (ISM) reported its non-manufacturing index rose to 55.2 percent in April – the highest reading in six months – up from 53.1 percent in March. Readings over 50 percent signal expansion, and the higher the reading, the faster the expansion.
Respondents to the ISM survey indicated a recovery from the harsh winter weather, as well as generally improving business conditions, helped to boost growth in April. In fact, among the 18 industries tracked by ISM, 14 reported growth last month. The new-orders barometer rose 4.8 points to 58.2 percent in April, and the business activity/production barometer increased 7.5 points to 60.9 percent.
Consumer Spending Accelerating at Record Pace
The first quarter concluded on a high note as consumer spending accelerated at its fastest pace since August 2009, reported by the Commerce Department. The March data showed consumer income and spending ticked up, with incomes rising 0.5 percent, and spending 0.9 percent – representing the strongest gain in income since August of 2013. The findings exceeded economists’ expectations, and logged the biggest gain for real disposable incomes since last September, and the largest increase in real consumption since August 2009.
The news is particularly encouraging on the heels of a 0.6 percent rise in wages last month, the strongest gain since last November. Also, the report suggests consumer spending during the second half of the first quarter made up for slower performance earlier in the year due to cold winter weather.
Employee Confidence in Economy Wavers, but Confidence in Personal Situation High
Randstad’s U.S. Employee Confidence Index decreased slightly in April by 0.6 points to 56.5. Although a small decline, the Index remains level to where it stood at this time last year, 57.0 in April 2013. The decrease is primarily due to waning confidence in job availability and the strength of the economy. However, when it comes to workers’ personal situation, confidence levels reached its highest level since September 2008 at 69.3. For example, the clear majority of workers are confident in the future of their current employer, while another half are confident in their ability to find a new job. Further, nearly three-quarters say it is unlikely they will lose their job in the next 12 months.
The Index also found Millennial workers are among the most confident when it comes to several aspects of the job market. In fact, the Index found 53 percent of 18-34 year old workers are confident in not only their ability to find a new job, but the second most confident among all generations when asked about the availability of jobs. Not surprisingly, the Millennial workforce is the most likely among all generations to consider looking for a new job in the next 12 months.