US DATA: Sharp Pullback In Job Losers Underpins Drop In Unemp Rate

April's headline household survey stats included the labor force contracting by a modest 43k (of 166.7M), with the participation rate unchanged at 62.6% (including - as we noted earlier - a fresh post-2008 high for prime-age participation).

• A strong if slightly odd breakdown in the unemployment rate figure though, which was down 0.1pp to 3.4%.
• Along with the minimal change in labor force size, and 139k gain in the number of employed, was a big drop in number of unemployed (-182k).
• Within the unemployed, job losers = lowest since 2021 (negative 307k). A key reason we didn't see a bigger unemp rate drop was the 135k re-entrants to the workforce and new entrants.
• Permanent job losers dropped 107k, the biggest drop since September 2022.
• This is potentially only a temporary reversal of recent trends which have seen new entrants and re-entrants slow and job losers contribute increasingly to the unemployment rate.
• But notable nonetheless, with the trend consistent with a labor market that may be softening too slowly for the Fed's taste.
• Unemployment rates by group were of note too in the household survey: All-time low (since data begins 1972) Black/African American unemp rate, dropped 0.3pp to 4.7%. And the lowest teenage unemployment since 1953 (down 0.6pp to 9.2%).