–Earnings,Hours Jump, Implying Rising Prodtn & Income; May Data Weaken?
By Joseph Plocek
WASHINGTON (MNI) – The U.S. April employment report shows decent
economic growth but take caution that recent May data are showing a
weakening in the labor market.
April printed +244,000 overall payrolls and had +46,000 upward
revisions to February and March. These gains show significant hiring
from the lackluster picture from January back into 2010. April private
payrolls printed +268,000 after +231,000 in March.
The unemployment rate edged up 0.2 point to 9.0% as labor force
growth slowed and the number of unemployed rose. This was the first gain
in the jobless rate since November 2010 and matches numbers posted
before the winter improvement in the economy. A 9% jobless rate is
probably still too high to give policy-makers any comfort, but the
latest move may be a blip.
Hours gained and private Average Hourly Earnings advanced 5 cents
to +2.1% over the year, suggesting gains in income and production. This
indicates no big effects yet from the Japan disaster on production.
April’s payroll composition showed more of the same: modest
recovery in goods-producing areas and gains in services but not at the
pace of a fast expansion.
April included: manufacturing jobs +29,000, construction +5,000,
retail +57,100 after two weak months, finance +4,000, temporary jobs
-2,300 but business services +51,000 overall, healthcare +37,300, and
restaurants +26,800. Government printed -24,000 due to drops in state
education and all local categories, a continued downtrend that reflects
on-going budget woes.
Overall this was a better-than-expected report, but we caution
that May’s preliminary employment indicators weakened, suggesting that
strength is not building.
Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Apr +244k —- +2.05% 100.7 9.0% (8.9603%)
Mar +221k +216k +1.95% 100.5 8.8% (8.8276%)
Feb +235k +194k +2.1% 100.2 r 8.9% (8.9223%)
** Market News International Washington Bureau: (202) 371-2121 **
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