April Payrolls fell 539k, 61k better than expected BUT the 2 prior mo’s
were revised down by 66k, so taken together, it was about in line with
estimates. Giving the # a boost was the 72k person increase in Govt
hiring, led by 66k within the Federal Govt. Construction fell by 110k,
mfr’g by 149k, financial by 40k and retail by 47k. Education and health
was the only private sector area of growth. The unemployment rate rose
to 8.9% as expected up from 8.5% but interestingly, the household
survery rose by 120k offset by a 683k increase in the labor force. The
factor helping the household # are those people who lose their jobs at
co’s go out and start their own at home. The augmented unempl rate rose
to 12.2%. The diffusion index which measures the # of those industries
hiring vs firing rose to the highest since Oct at 28.2 up from 20.3. The
B/D model added 226k up from 176 in Apr ’08, a bad assumption so today’s
# is overstated to the better. The aggregate hours index fell again and
doesn’t bode well for income growth in the next few months.

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