April Employment Numbers are Encouraging

Kansas City’s unemployment rate dropped nearly a whole point between March and April (from 5.5 percent to 4.6 percent) according to the Bureau of Labor Statistics. Overall employment grew by nearly 7,000 while the labor force declined 2,473. This is all certainly positive news, but remember — we are dealing with non-seasonally adjusted data at the metro level, so these figures need to be taken with a grain of salt. Historically the unemployment rate normally drops between March and April. Since 2000, the local unemployment rate has dropped about a half percent every April.

Source: Bureau of Labor Statistics

The chart above shows the recent unemployment rate trend since 2000. The red dots show the unemployment rate for each April. You can see that the April rate is typically in a valley, and in most instances is the lowest unemployment rate for the year. So, the nearly 1 percent drop in the unemployment rate is somewhat significant, but we will need more months of data to determine whether we are just seeing typical seasonal effects, or if we maybe seeing the beginning of a positive trend in employment.

What maybe more noteworthy about Kansas City’s April unemployment rate is its relationship with the national rate.

Source: Bureau of Labor Statistics

Kansas City’s April rate of 4.6 percent was lower than the national rate of 4.8 percent. This marks the first time this has occurred since April 2003. It used to be that Kansas City’s unemployment rate was consistently lower than the U.S. rate, but we’ve been consistently higher the past five years (shown in yellow). We will keep an eye on this relationship to see if this is a one-month aberration, or a return to our normal pattern.