Nonfarm Payrolls Drop; Jobless Rate at 5.0%

WASHINGTON — The U.S. April employment report is best described as “less weak than feared” but still shows a recessionary environment. It’s far too early to call stabilization in the labor market.

Nonfarm payrolls printed down 20,000 in their fourth drop in a row and the February-March revisions totaled an 8,000 loss. The payroll composition mirrored recent movements, with services stabilizing.

Manufacturing posted a 46,000 decline, construction fell 61,000, retail dropped 26,800, information decreased 2,000, and temporary help slid 9,300. Administrative jobs posted up 13,100, health care added 36,900, and restaurants gained 18,000.

Average hourly earnings printed just a 0.1% rise to plus-3.4% over the year on drops in manufacturing, utilities, and natural resources wages.

Hours and earnings stagnated, suggesting lower production and incomes in upcoming reports.

The only puzzling aspect of the report was the 0.1% point dip in the unemployment rate to 5.0%. There were no suspicious movements in the size of the labor force or participation, and unemployment fell pretty much across categories. The normal recession pattern is for rising unemployment.

Perhaps the lack of qualified workers as the population ages and the shift in the economy away from manufacturing has employers retaining more employees than in the past. The one-month employment diffusion index was 45.4%, hardly strong. And a Bureau of Labor Statistics economist pointed out that involuntary part-timers were up 306,000 in April, the largest such gain in four years.

— Market News International

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