By Denny Gulino
WASHINGTON (MaceNews) – The April jobs report was full of superlatives Friday, from the strong payrolls total to the best unemployment rate since 1969, confirming the Federal Reserve’s positive views and challenging any remaining pessimism about first-half economic performance.
The 263,000 payrolls total, the 3.6% unemployment rate, the net 16,000 upward revision for February and March, the bounce back up for the labor participation rate to be flat for a year in which it was expected to deteriorate, all were a combination that went well beyond expectations.
Wage gains, however, did not show any new acceleration, again up 3.2% over a year. The work week got shorter by a tenth of an hour. The broad unemployment rate dubbed “U-6,” which includes forced part-time work and marginal fringes of the labor market did not move, staying at 7.3% for the third month. Still, that was well under January’s 8.1% and better than December’s 7.6%.
Coupled with Thursday’s first-quarter productivity report that reinforced last year’s trend toward improvement, there was nothing to call into question Federal Reserve Chairman Jerome Powell’s view Wednesday that the economy is healthy and low inflation may be “transient.” The first quarter GDP report this week was also better than expected, at 3.2% annualized.
Thursday’s initial claims for jobless benefits, a more recent number than the monthly employment report’s snapshot, had shown a second week of elevation, again raising the question whether job creation had peaked. Yet its performance could easily be blamed on typical variability around Easter, as happens with all major holidays.
The jobs category of professional and business services, key to a strengthening economy, was a standout total, adding 76,000 positions in April. That brought the monthly average gain over 12 months to 44,500.
Construction rose by 35,000, also above the last year’s trend. Health care gained 27,000, maintaining its typical strength but slightly below trend. Social assistance added 26,000. Financial activities turned in a relatively strong number, up an above trend 12,000, mostly in real estate, rental and leasing.
Retail went the other way with another month in negative territory, losing 12,000, most of it in general merchandise. Within retail, motor vehicles and parts added 8,000 jobs.
The report’s component numbers showed a large increase in those excluded from the work force, which helps boost the top-line numbers. The “not-in-the-labor force’ total for April was 96.223 million, up by 647,000. Those categorized as unemployed slipped below 6 million, at 5.824 million, better by 387,000. The employed slipped 103,000, to 156,645.
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Update: In mid afternoon the 10-year note had rallied by 4/32 to a yield down to 2.526% while stocks showed a moderate gain. The Dow industrials were up 199 at 26,513 04 or +0.76%. The S&P 500 was ahead 26 at 2944.