WASHINGTON — The April employment report was more modest than the headlines.

Key takeaways: good jobs growth and a declining unemployment rate will steal the spotlight but underlying data are somewhat weaker and are in line with further modest GDP growth. The March early swoon in the economy appears to be an illusion that was largely revised away, though the data suggest GDP slowed into Q2.

April payrolls were up a good 165,000 and February-March revisions were up 114,000 on net. The unemployment rate fell 0.1-point to 7.5%, still well above the 6.5% mentioned in Federal Reserve communications.

But April payrolls are really a deceleration from the revised 206,000 average gain in Q1 (a number more in line with GDP growth with a 3% handle). The drop in the jobless rate is really merely -0.06-point unrounded (it looks like fewer adult women were unemployed), and the composition of jobs added were in some of the "weaker" occupations, leading one to wonder how many retail, restaurant and garbage collection jobs can be supported if the goods-producers are not growing faster.

Participation in the labor force was steady.

Hours fell, but earnings gained for mixed impact on production and income.

Payrolls: manufacturing was flat, construction fell 6,000, retail grew 29,300, temp jobs rose 30,800, administration/waste increased 43,300, healthcare gained 19,000, finance climbed 9,000, restaurants added 37,900 and government slid 11,000, mainly federal. The last probably is due to the impact of the budget sequester.

Overall, a fair report showing growth but probably consistent with real GDP slowing in Q2.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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