U.S. April Employment: What You Need to Know

Posted on 03/09/2017 10:23 AM

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April Nonfarm Payrolls: 160,000

Expectations: 200,000

What went into the numbers: Job growth was strong in professional and business services, health care and financial activities. Some 65,000 jobs were added in professional and business services, above the average of 51,000 seen for the past 12 months.

Health care employment increased by 44,000 with most of the gains in hospitals and ambulatory care, putting the sectors job growth at 502,000 over the past 12 months.

Mining continued to shed jobs (category includes oil industry), with another 7,000 jobs lost. Since its peak in Sept. 2014, the sector has seen 191,000 jobs cuts with most in the support activities side.

As for other major sectors, the Labor Dept. said construction, manufacturing,  wholesale trade, retail trade, transportation and warehousing, information,  leisure and hospitality, and government, showed little or no change over  the month.

Revisions to prior months data saw March revised to 208,000 (215,000 prior) and February was revised to 233,000 (245,000 prior), for a combined reduction of 19,000.

Unemployment rate: 5.0%
Expectations: 4.9%

What fed the steady rate: The unemployment rate remained at 5%, while the number of those unemployed was largely static at 7.9 million. The number of long-term unemployed declined to 2.1 million, down 150,000. 

Somewhat surprising, the labor force participation rate declined to 62.8% after having risen to 63% in April. The employment-population ratio was at 59.7%, the lowest it has been since Jan. when it was 59.6%.

One bright spot in the report was average hourly earnings which rose 8 cents, putting the year-over-year increase at 2.5%. That is a solid rise from the 2.3% level registered in March.

The average workweek increased  by 0.1 hour to 34.5 hours in April.

Comments: Already, most are downgrading the chances for a June rate rise after this rather disappointing jobs update. The figure caps off what has been a string of disappointing US economic updates for the most part, convincing market participants there is still a lot of economic uncertainty out there.

US government bond yields fell and the dollar moved lower against the yen and euro but has recovered some of the decline. The Fed funds futures are also signaling little expectation for a June rise, now putting it at just 4%.

Fed members will get another jobs update prior to the June 14-15 FOMC session, but this report certainly suggests the economic data flow will have to strengthen considerably to start prompting any increased expectations for a June rate increase.

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