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Nonfarm Payroll Jobs Correct: 211K in April

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Friday, May 5th, 2017

A heavily anticipated new U.S. jobs number from the Bureau of Labor Statistics (BLS) has hit the tape before the opening bell this Friday: 211K new jobs — including both private sector and government-based — were created in the month of April, and the unemployment rate has fallen another tick to 4.4%, the lowest in 10 years. This is excellent news for those market participants looking for a bounce back from the previous month’s disappointing BLS payroll number.

That said, the originally reported 98K for the month of March was actually revised further downward in this morning’s report to 79K. So when we look at today’s 211K headline, it might be a good idea to factor in last month’s figure and average them out: 145K, below the average payroll number we’ve seen so far this year of 185K.

At the same time, looking at it from this angle, we might be seeing more of a Goldilocks number, in that 145K new jobs per month over the past two is strong enough to continue pushing down the unemployment rate while perhaps causing the Fed to hold up raising interest rates aggressively as 2017 moves along.

The U-6 read, sometimes referred to as “real unemployment,” is another dollop of good news, falling to 8.6%, the lowest since November 2007, or roughly a year before the Great Recession took hold. This speaks to a growing number of Americans satisfied with their employment situation, whether moving from part-time to full-time work, finding jobs in their chosen field, etc. The long-term unemployed rate has fallen to 22.6%; there are 433K fewer people unemployed year over year, another good number.

Average hourly earnings also rose 0.3%, which is yet another pleasing read, although the revision to March pushed this back down another 0.2%. So while we are indeed seeing wage growth along with falling unemployment numbers — a key consideration for analysts making sense of the U.S. economy in real time — we may not be seeing quite as much growth in this respect as this morning’s headline might indicate.

Other Fish to Fry

While we may understandably see some grandstanding from the White House today about these happy numbers, there is plenty of heavy lifting yet to do, not only in the U.S. but the global economy as well. The House having passed a new healthcare bill which most market participants have not yet parsed through (and may be displeased with it once they do) will probably dominate today’s news cycles, and the showdown in France between right-wing National Front leader Marine Le Pen and her centrist banker-class opponent Emmanuel Macron takes place on Sunday.

Currently, odds are with Macron winning this run-off, although we can all think of a couple big electoral upsets that have happened in the past year. That said, should Le Pen pull off this global upset trifecta, it may mean the end of the European Union and the euro monetary unit itself. This would put today’s good jobs figures well into the rear view.

Mark Vickery
Senior Editor

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