Increase of 550,000 Household Jobs, Highest Since 2007; Record 7-Month Increase in Temp Workers; 23-Month High for Mfg. Overtime Hours
1) Average manufacturing overtime hours increased to 3.9 hours in April (from 3.7 hours in March), reaching the highest level in almost two years, since May 2008 (see graph). Manufacturing overtime hours have increased or stayed the same in each of the last 12 months. Compared to the low last March of 2.6 hours, overtime has increase by more than a full hour to 3.9 hours in April, which is a 50 percent increase.
2) The number of temporary help workers increased in April by 26,200 to 2,054,700 employees, the highest level since November 2008, 17 months ago (see graph above). Temporary workers increased in April for the seventh straight month, following 23 straight months of declines, and it marks the first time since early 2000 of seven consecutive monthly increases. The 330,300 increase in temporary jobs since the September-low is the largest 7-month increase since this data series started in 1990.
3) Nonfarm payrolls increased by 290,000 in April, the largest monthly gain in four years - since March 2006 - and private sector jobs increased by 231,000. According to the more comprehensive household survey, 550,000 jobs were added in April, the largest monthly increase since November 2007.
Bottom Line: As I have reported before, both the surge in temporary workers and the increase in overtime hours are early indicators of a broader recovery in the labor market, and signal future increases in job creation. In the early stages of economic recovery, it makes sense for cautious employers to both increase temporary hiring and increase overtime hours of existing workers. As the economy stabilizes and expands and employers become more confident there will be broader hiring for permanent workers. Today's report showing a 550,000 increase in the household-survey employment level, a 29-month high, signals that broader employment gains are starting.
Further, the increases in both manufacturing jobs (44,000 new jobs in April and 101,000 so far this year) and construction employment (gains in the last two months totalling 40,000), in two of the hardest-hit sectors during the recession, provide additional evidence of ongoing and broad-based hiring activity.