Payrolls rock but household survey doesn’t

The government said the economy added 244k jobs in April, well above estimates of 185k and the private sector added 68k more jobs than expected, totaling 268k. The prior two months were revised up by 46k. In contrast, the household survey shed 190k, the 1st time since Nov and because there was little change in the size of the labor force, the unemployment rate rose to 9% from 8.8%. The all in rate rose to 15.9% from 15.7%. Discouragingly, average hourly earnings rose just .1% m/o/m, below the recent CPI readings. Encouragingly, the average duration of unemployment ticked down a touch. The average workweek held steady. Manufacturing added 29k jobs and remains a key area of health. Another big swing upward in the overall figure was a 57k job gain in retail. The government at all levels shed jobs. The birth/death model magically added 175k jobs, 34k more than the same month last year, 25k of which were in construction for what its worth. Bottom line, the best job gain since May ’10 is definitely great to see. The average over the past 6 months is now at 169k, good but not great. In terms of the Fed’s response to a continued improvement in the labor market, the only thing they are watching right now is how markets/economy respond to the end of QE2 and they’ll then take it from there.

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