Following a spate of disappointing economic reports in recent days, in which we had been informed that the nation's economy had slowed its rate of growth to an unprepossessing 1.8% during the opening quarter of this year, that the private sector--according to an ADP employment survey--had created fewer jobs last month than expected, that the services--or non-manufacturing--sector had slowed its rate of growth last month, and that first-time unemployment claims had soared in the latest week, fears were being voiced that this morning's report on non-farm payrolls from the U.S. Labor Department would similarly prove unwelcome. In fact, expectations had been coming down modestly in the past few days from an initial expectation of 200,000 jobs being added in April to a less impressive presumptive gain of 186,000. The weaker business data and the worries about such pending reports had shaken many investors over the past several market sessions, causing a series of weaker equity market performances.
Then, in a positive surprise, Washington reported that 244,000 new positions were added last month. What's more, if we exclude jobs lost by the government, as states and localities work to trim payrolls in an effort to balance their budgets, the private-sector employment increase in April was a rather impressive 268,000 positions.
Individually, we saw in the report that the retail trade created 57,000 jobs last month, while employment in the professional and business service areas jumped by 51,000. Moreover, health care continued to add jobs at a decent pace in April, creating 37,000 new positions. Also, the leisure and hospitality sectors added 46,000 jobs and manufacturing produced 29,000 additional payrolls. From a job creation standpoint, therefore, it was a good report. Also, the March payroll increase was revised from 216,000 to 221,000 and the February gain was upwardly revised from 194,000 to 235,000.
On the other hand, the unemployment story remains a worrisome one. That is bacause, the jobless rate, which had been expected to hold steady at 8.8%, rose instead to 9.0%. However, that rate was still 0.8 percentage point lower than in November. Even so, it is a high and very unsettling number. What's more, the 9.0% rate excludes the number of persons employed part time for economic reasons, those working temporary jobs, who would rather secure permanent employment if it were available and discouraged workers, who have stopped looking for work and are, thus, not considered among the technically unemployed. If all these groups are factored in, the real jobless rate would be well in excess of 15%.
Finally, the report also showed that average hourly earnings had ticked up by $0.03 to $22.95, and that the aggregate workweek had remained unchanged at 34.3 hours. Neither of these data points varied from the consensus expectations.
Overall, though, it was a decent report, within the confines of a slowly and unevenly expanding economy, and a report that should somewhat counter the listless business reports issued over the past several days. Note also, that the May employment and unemployment report is due out on Friday, June 3rd. At that time, the April data will be revised, as needed.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.