806,000 people dropped out of the labor force in April (seasonally adjusted), many of whom likely caused the unemployment rate to plunge 0.4 points to 6.3%. Fewer people not counted as unemployed even though they were unemployed makes the headline number drop. The not-seasonally-adjusted number leaving the civilian labor force was 782,000.
People are making too much of this data point, however. Granted, the drop was large for a March to April cycle. But key is that the civilian labor force level always peaks in July each year and then declines and rises again to a new high. It is not appreciated that a new all time high in the civilian labor force level was reached just last July at 157,196,000. True, the pace of achieving new peak levels was arrested after July 2008. Adding about 1.5 million to the labor force each summer as in the past would mean we should have been at about 163.8 million in the summer of 2013. We were off that pace by 6 million. The April 2014 level, however, was higher than the April 2013 level, which was higher than the April 2012 level, which was higher than the April 2011 level. The point is the civilian labor force level is climbing out of its hole, and the peaks and valleys prove it. When they stop proving it we should be concerned.
The 288,000 added to payrolls in April stands in vivid relief against the 190,000 average added to payrolls per month in the preceding twelve months. The employment level of those who are 25-54 years old surged 321,000 to 95,421,000, still almost 6 million under the November 2007 high. At 288,000 per month for a year, one could easily add almost 3.5 million to payrolls and in two years return the levels of those of prime working age to the previous peak.
Per hour earnings for all employees did not rise and remained flat. That is concerning, but at least production and nonsupervisory employees saw an increase.
