April Payrolls rose 115k, 45k less than expected BUT the prior two months were revised up by 53k and considering the weather issues, its best to average the months and thus things are about in line. The private sector added 130k jobs vs the estimate of 165k but last month alone was revised up by 45k. The unemployment rate ticked down to 8.1% but for the wrong reason as Household employment fell by 169k, more than offset by a 342k decline in the size of the labor force. The participation rate fell to 63.6%, the lowest since 1981. Encouragingly, the avg duration of unemployment fell to 39.1 weeks from 39.4 weeks, the lowest in a year. Discouragingly for many, avg hourly earnings were flat m/o/m and the y/o/y gain of 1.8% is well below CPI running at 2.7%. The avg workweek was unchanged at 34.5 hours. Mfr’g added 16k jobs, 4k less than expected but the prior month was revised up by 4k. Construction fell slightly and Retail saw job gains after the two previous months of declines. Temp help rose by 21k. While the Federal Govt added 10k workers including 8k more in the Post Office (which makes little sense), local gov’ts shed a net 11k jobs, led by a drop in education. Bottom line, the muted market response to the weak headline # was due to the offset from the upward revisions in the two prior months, leading to an in line figure taken together. This said and as I’ve been saying, the data isn’t strong enough to get excited and not weak enough to get the Fed to think they need to do more right now, a no man’s land that will keep a lid on stocks for the time being.
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