Higher-than-expected job additions in April

Pre-market futures are like seedlings with their first green shoots in the ground on new Employment Status report released this morning – aka the US Bureau of Labor Statistics (BLS) Nonfarm Payrolls Report – where we saw better than expected jobs numbers for the month of April. A 428K stock beat the 400K analysts were looking for; the Unemployment rate remained equal to the previous month at 3.6%.

That 428,000 figure was also exactly in line with the March figure, which was revised down 3,000 positions, as February’s boffo jobs reports returned 36,000 from its 750,000 reported in the origin. So while we’re down slightly from the three-month average, it’s still the 12th consecutive month above 400,000 new jobs created, which is solid from a historical perspective.

Average hourly earnings was up +0.3% on the month, a little behind the +0.4% in March, and year-on-year it is +5.5% – a figure nice and meaty for the overall job pay. Also keep in mind that this was deliberately caused when the Fed delayed raising interest rates until inflation had already taken hold in the economy. So while inflation remains a major problem for the US economy, at least wage growth is heading in the right direction, even if it’s not keeping pace.

Labor Force Participation also slipped to 62.2% from a slightly lowered 62.4% the previous month. This means, of course, that less than 2/3 of able-bodied Americans are employed; before the pandemic, the participation rate was 63.4%, which is 120 basis points higher than today, but still not optimal. The average workweek reached 34.6 hours, while the U-6 (aka “real unemployment”) recorded another 10 basis points at 7.0% – still historically strong, but not heading in the right direction .

Of course, the fact that the bond market is stalling the market recovery from the Fed’s 50 basis point interest rate hike on Wednesday is the real short-term narrative. We are still experiencing bear market conditions, made more cruel by the possibility of seeing the light at the end of the tunnel and not getting there. The jury is still out on whether we get a “soft landing” for the economy or slide into a recession.

By the way, those seedlings in the ground had already disappeared in the minutes before the opening bell: the Dow Jones rose from -75 points before the jobs report to +33 points a few minutes after, but it is now at -160 points. The S&P 500 is at -25 points at this time and the Nasdaq, after climbing +25 points on the release of the BLS report, is now -105 points ahead of the open.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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