April employment data remained dismal: it is too soon to call a turn in the economy. Even if the pace of job losses is somewhat less than in the first quarter, it is still severe and consistent with an ongoing major contraction.

April payrolls plunged 539,000 and revisions to February-March were off 66,000, putting an “adjusted pace” at slightly more than 600,000 jobs lost, compared to an average of slightly more than a 700,000 drop in the first quarter. This is a slowing contraction, but still the worst showing since the early 1980s, and before that in the aftermath of World War II as production adjusted to consumer goods.

Moreover, the census added about 63,000 jobs to the total.

The civilian unemployment rate jumped 0.4 points to 8.9% as the number of jobless surged. It was the highest jobless rate since September 1983. Those not in the labor force also jumped, a move typical of periods of protracted unemployment.

Hours and wages moderated, suggesting slower production and incomes in upcoming data. Average hourly earnings rose just 0.1% as wages fell outright in construction, information, and leisure.

Payroll composition showed widespread losses: manufacturing dropped 149,000, construction fell 110,000, retail slid 46,700, finance declined 40,000, leisure decreased 44,000, and services plunged 269,000 overall — but health care rose 17,000.

The only strength in payrolls was in government at plus-72,000 as federal employment advanced 63,000.

— Market News International

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