Employment Situation: Strong Gains As Unemployment Rate Drops
May 3, 2019
Bottom Line: Nonfarm payroll growth rose sharply in April led by very strong gains in professional and business service jobs. Construction and government jobs were also strong while the retail sector continued to shed jobs. The unemployment rate fell 20bps to 3.6% due to a surprise decline in the labor force. The household employment survey, used for calculating unemployment, also showed a surprise decline, diverging sharply from the payroll survey and suggesting there may have been data collection issues causing volatility in these data-points. Wage growth was a touch lower than expected wit the total weekly paycheck falling as hours worked also fell slightly. Still, these data were not enough to change the overall trend towards moderately accelerating wage gains, if still well below rates of growth seen in prior cycles. Overall this was another solid report, confirming the trend towards robust and tight labor markets. Payroll Employment rose by 263k in April, compared with market expectations for an increase of 177k. The prior 2 months were revised, lower in March by 7k and higher in February by 23k. Government jobs ROSE by 27k. Consequently, private sector jobs ROSE by 236k. Overall employment is now 1.8% ABOVE its year ago level, Over the past 12 months, 2,620k jobs have been created.
- In April, the job gains were in Trade, Transportation & Utilities (+17k with -12k of those in Retail Trade),
- Professional & Business Services (+76k with the addition of 17.9k in Temp Help Services),
- Education & Health Services (+53k),
- Leisure & Hospitality (+34k),
- Construction (+33k),
- Government (+27k),
- Other Services (+14k), and
- Financial Activities (+12k).
- Jobs were shed in Information (-1k).
Article by Contingent Macro Advisors