Pre-market futures are like seedlings with their first green shoots in the soil upon the new Employment Situation report released this morning — aka the nonfarm payroll report from the U.S. Bureau of Labor Statistics (BLS) — where we saw better-than expected headline jobs numbers for the month of April. A headline of 428K beat the 400K analysts were looking for; the Unemployment Rate stayed even with the previous month at 3.6%.
This 428K figure was also exactly in-line with the March figure, which was revised downward by 3000 positions, whereas February’s boffo jobs reports gave back 36K from its original 750K reported. So while we’re down on the three-month average slightly, it’s still the 12th straight month above 400K new jobs created, which is robust from an historical standpoint.
Average Hourly Earnings rose +0.3% on the month, a tad off pace from the +0.4% from March, and year over year this is +5.5% — a nice, meaty number for overall employment compensation. Keep in mind, too, that this was purposefully brought about when the Fed delayed raising interest rates until inflation had already set in the economy. So while inflation is still a major problem for the U.S. economy moving forward, at least wage growth is going in the right direction, even if its not keeping pace.
Labor Force Participation also slipped to 62.2% from a slightly downwardly revised 62.4% the previous month. This means, of course, that fewer than 2/3 of able-bodied Americans are employed; prior to the pandemic, the participation rate was 63.4% — 120 basis points higher than where we are today, but still not at optimum. The Average Work Week ticked up to 34.6 hours, while the U-6 (aka “real unemployment”) notched another 10 basis points to 7.0% — still historically strong, but not going the right direction.
Of course, the bond market stonewalling the market rally following the Fed’s 50-basis-point hike of interest rates on Wednesday is the real narrative in the near-term. We’re still experiencing bear-market conditions, made crueler by being able to see the light at the end of the tunnel without actually getting there. The jury is still out on whether we get a “soft landing” in the economy or whether we descend into recession.
Those seedlings in the soil, by the way, have already gone away in the minutes ahead of the opening bell: the Dow went from -75 points prior to the jobs report to +33 points minutes afterward, but are now at -160 points. The S&P 500 is -25 points at this hour and the Nasdaq, after climbing +25 points upon the release of the BLS report, is now -105 ahead of the open.