The U.S. economy added more jobs than forecast in April, easing concern that higher fuel prices are slowing the economic recovery.Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, after a revised 221,000 gain the prior month, the Labor Department said today in Washington. Economists projected an April rise of 185,000, according to the median estimate in a Bloomberg News survey. Employment excluding government jobs jumped the most in five years. The jobless rate rose to 9 percent, the first increase since November.
More jobs and rising wages may give households, whose spending accounts for 70 percent of the economy, the means to overcome the highest gasoline prices in almost three years. Federal Reserve Chairman Ben S. Bernanke and some of his colleagues have signaled they plan to forge ahead through June with record monetary stimulus to bolster the expansion.
“The recovery has progressed into the self-propelling stage, where it’s less vulnerable to short-term swings in sentiment,” said Jim O’Sullivan, chief economist at MF Global Inc. in New York, who forecast a gain of 250,000 jobs.
On a personal note -- I am very relieved by this report. The events of the last few days have been very concerning, with the rise in initial unemployment claims particularly being particularly hair-raising. This goes a long-way to arguing that what we're seeing are temporary fluctuations.
NDD here with a few comments:
- Unemployment ticked up .2% because the household survey showed 190,000 jobs *lost*.
- Manfuacturing workweek, a leading indicator, was unchanged.
- Private payrolls were up 268,000. Government jobs continue to slowly bleed.
- Construction jobs were unchanged. That area of hemorrhaging is over.
- Perhaps most importantly of all, February and March were both revised upward, by a total of 47,000. This continues the pattern of relentless upward revisions. In the last three months, job gains have averaged 233,000. Not jumping for joy numbers, but not bad at all either.
- Since nonfarm payrolls are the quintessential coincident indicator, and initial jobless claims are leading, unlike Bonddad these do not alleviate my concern about the next few months. For that, we need Oil to decline - anybody heard anything about that?
9 comments:
NDD here with a few comments:
- Unemployment ticked up .2% because the household survey showed 190,000 jobs *lost*.
- Manfuacturing workweek, a leading indicator, was unchanged.
- Private payrolls were up 268,000. Government jobs continue to slowly bleed.
- Construction jobs were unchanged. That area of hemorrhaging is over.
- Perhaps most importantly of all, February and March were both revised upward, by a total of 47,000. This continues the pattern of relentless upward revisions. In the last three months, job gains have averaged 233,000. Not jumping for joy numbers, but not bad at all either.
- Since nonfarm payrolls are the quintessential coincident indicator, and initial jobless claims are leading, unlike Bonddad these do not alleviate my concern about the next few months. For that, we need Oil to decline - anybody heard anything about that?
175,000 of those "jobs" are the result of the infamous BLS fudge factor known as the Birth/Death Index.
Get a grip.
I was just going to ask the question: arent initial unemployment claims a leading indicator? I think the high numbers of new claims mean that next months job report will be bad, meaning we are headed back to monthly job gains under 100,000.
@NM Patriot
Just because you don't understand the methodology behind the birth/death adjustment (and the methodology is solid and goes back many years) doesn't mean it is fudged. Also, the average birth/death adjustment for April is +275,000, so this would be lower than normal.
@Andy Katz:
It is a leading indicator, but it doesn't mean we are headed back to below 100K gains, rather it might mean we have a period of slower job growth, but its too early to say how weak, in addition, commodities are starting to fall off, the bubble is bursting, which means that going forward we will likely see the economy regain any lost traction quickly.
My guess is May's figures will likely be a bit weak, but by June or July we'll see a pickup in hiring
The job report is a relief and the odds that a recession started last month dropped to a very low percentage.
Now the bad news. Most of the jobs gains occurred before the spike in intial claims in the middle of last month, and much of the gains were due to McDonalds hiring over 60,000 new workers. The household survey also showed a net loss of 190,000 jobs. I expect a very weak May jobs report.
@esong_98
The McDonald's hiring is likely not in this report since the reference week was the week of the 11th of April and the hiring was on the 19th. Should be in next month though.
Question for the experts: Was basically all the recorded job growth over the last few months coming from the birth/death estimate? Was it half? Was it a quarter?
Because this is an atttempt to measure jobs in small businesses and single proprietorships, I would assume that an enormous gain in these types of jobs in the last three months would reflect an explosion of entrepeneurship in our society the likes of which we have not seen ever. And that would be interesting.
One potentially disturbing harbinger of reports to come is the decline in "Temporary Help Services." One would expect to see that number continue to increase as it has if the economy were truly expanding at anything beyond a tepid pace. Just having the economy grow fast enough to keep the unemployment rate flat will not produce the favorable response in the electorate the politicians seek.
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