By Thomas Cooley and Peter Rupert
The BLS announced a 263,000 rise in payroll employment for April and 16,000 upward revision over the past two months.
What should be noted is just how difficult (and maybe not so useful) it is for economists to forecast even out a month. This from CNBC:
Economists expect that the job market remained strong in April, and the economy added 190,000 jobs, about the same as March.
Markets were already on edge heading into the Friday employment report, and economists point to some variables that could impact the headline number.
For one, some economists say Boeing’s production slowdown could be a negative for manufacturing jobs, while government hiring of census workers could provide a surprise increase in payrolls in the tens of thousands. Goldman Sachs economists expect 20,000 workers were eliminated due to weather, but they still expect total jobs of 195,000.
Bank of America economists expect an above average jump of 250,000 jobs. A tracker that the bank uses is seeing private payrolls rising 335,000.
Some economists said there could be an upside surprise in the jobs data because of ADP’s strong report of 275,000 private sector payrolls in April. But Moody’s Analytics chief economist Mark Zandi said the number was suspect, and he expects April jobs from the Bureau of Labor Statistics to be closer to 175,000 to 200,000.
The bottom line: a range between 175,000 to 335,000!
Private payroll employment was up 263,000 with the government adding 27,000. There were a few small negatives as well. Retail trade fell for the third straight month, down -12,000 in April. Utilities and motor vehicle parts have also been weak of late.
Average weekly hours fell slightly from 34.5 to 34.4 and average hourly earnings rose from $27.71 to $27.77. That average hourly earnings is much above the CPI means there are gains in real earnings.
The household survey shows a decline in the labor force, down 490,000 so the labor force participation rate fell from 63.0 to 62.8. The employment to population ratio remained constant at 60.6. The unemployment rate fell to 3.58%, the lowest since the end of 1969.
The BLS released productivity on May 2: output was up 4.1% and hours up 0.5% leading to a 3.6% gain in non-farm business sector productivity. Unit labor costs in the non-farm business sector declined 0.9 in the first quarter of 2019 and increased only 0.1% over the last four quarters. Manufacturing sector labor productivity increased 1.7%, however output decreased by 1.0%, but hours worked decreased even more, down 2.6%.
The big picture
The strength of the report, including continued wage gains, damps the likelihood the Fed will be talking about any rate cuts soon.