Good news (which has been scarce on the economic front) returned this morning when the U.S. Labor Department reported that non-farm payrolls had increased by a better-than-forecast 165,000 in April. Consensus expectations had been for an uptick of 150,000. Along with the welcome payroll increase, the government also reported that the nation's unemployment rate came in lower than forecast, reaching 7.5%. Although that was little changed from the prior month (when the rate was 7.6%), the jobless rate has now ticked down by 0.4% since January.
In addition to the favorable payroll numbers for April, the total number of jobs added for February and March were revised nicely higher. Specifically, employment growth in February went from an initially estimated 268,000 to a gain of 332,000 for the month. And in March, the earlier estimated tepid increase of 88,000 new jobs was upwardly revised to show a gain of 138,000. All told, the average monthly increase for the past 12 months has been 169,000. It is generally viewed that some 200,000 jobs need to be added on average per month to materially lower the jobless rate. We seem to be headed in that direction - at last.
In addition to these overall numbers, the government also reported that job growth of note came in the professional and business services category, in temporary services, and in health care. However, employment changed little last month in construction, after having gained an average of 27,000 a month over the past six months. Also, manufacturing jobs changed little, as well, last month.
Meanwhile, the average workweek for all employees fell by 0.2 hours in April to 34.4 hours, while average hourly earnings for all employees on private non-farm payrolls rose by four cents, to $23.87.
In sum, and notwithstanding some wrinkles in the report, this was a most reassuring survey. Not only did April see some impressive gains, but the news for February and March was notably better than earlier indicated.
At the time of this article's issuance, the author did not have positions in any of the companies mentioned.