Payrolls declined by 20.000 in April, lower than expected (-100.000). However, looking just below the surface of the headline data reveals a fast deterioration in other job measures.
The number of people employed part-time for economic reasons, i.e. those that could not find full-time jobs or had to work part-time because business was slow, swelled sharply by 306.000 in April to a total of 5.22 million. This is the highest number since 1994 (see chart below, click to enlarge).
Such part-time employment now accounts for 4.52% of all private jobs, the highest percentage in 13 years and up from 3.4% two years ago (see chart below).
The Bureau of Labor Statistics counts everyone who worked 1 to 34 hours per week as employed and includes them in the headline payroll numbers, even though such employment clearly results in fewer hours and lower pay.
Taking this analysis one step further, part-time employment for economic reasons, i.e. forced part-time, accounts for 21% of all part-time jobs. This is also the highest level since 1994.
In summary, while the headline employment numbers are not declining as fast as during previous slowdowns, the qualitative job measures are worsening and are already at multi-year points.
The most likely cause is that employers, particularly those in the service sectors, are hoping the economy will rebound soon, so instead of fully laying off people they are cutting costs by forcing employees to work less, for less pay, i.e. forcing them into part-time un-employment.
What does this mean for the economy? Let's combine the poor employment picture with sharply higher costs for necessities such as food and fuel, the zero/negative saving rate and record high debt: the result is most likely going to be a continuing curtailment of discretionary personal spending. With personal consumption accounting for nearly three quarters of GDP, I believe we are in for a prolonged period of weakness.
Looking at just the headline BLS numbers is currently pretty misleading and may cause misplaced optimism.