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The US Labor Department April jobs report Friday showed a higher than expected 263,000 NFP jobs added. Unemployment stayed fell to 3.7%, the lowest since December 1969. Participation rate fell to 62.8 from 63.0%.

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April 2019 U.S. Employment Report

Despite the Fed having raised rates four months ago, market chaos and the government shutdown and the resultant uncertainty with Federal Reserve President Powell's seem unsure of the path for wages. In February American wages hit their highest levels in a decade at 3.4%, this trend continued as expected through March.

The market expect  the April report released Friday to see nonfarm payrolls rise in line with longer-run trends in monthly employment growth at a consensus of 185,000 new jobs. Logic suggested a return to the mean after the volatility in the hiring data. The wages data gives us indications of the FOMC plans on rates into 2019 and 2020. Unemployment is at a 49 year low with higher participation and the two month NFP revision was +16,000 change to jobs last month.

US Jobs April 2019

Employment:

  • Non-farm payrolls+263k vs +185K expected, Prior 1189K (revised from 196K)
  • Unemployment rate 3.6% vs 3.8% expected/prior
  • Participation rate 62.8% vs 63.0% expected.prior (63.2% highest since 2014)
  • Underemployment rate 7.3% vs 7.3 % prior
  • Two month net revision +16K 
  • Manufacturing payrolls +4k vs -6k Prior (First loss since Oct 2016)
  • Private payrolls +236k vs 182K Prior, expected

Wages:

    • Average hourly earnings +0.2% m/m v +0.1% Prior/Expected
    • Average hourly earning +3.2% y/y vs 3.3% exp, Prior 3.4% y/y

US Jobs April 2019 Earnings by Industry

Household Survey Data

The unemployment rate declined by 0.2 percentage point to 3.6 percent in April, the lowest rate since December 1969. Over the month, the number of unemployed persons decreased by 387,000 to 5.8 million.

 Among the major worker groups, the unemployment rates declined in April for adult men (3.4 percent), adult women (3.1 percent), Whites (3.1 percent), Asians (2.2 percent), and Hispanics (4.2 percent). The jobless rates for teenagers (13.0 percent) and Blacks (6.7 percent) showed little or no change.

Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 186,000 over the month to 2.7 million.

In April, the number of persons unemployed less than 5 weeks declined by 222,000 to 1.9 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in April and accounted for 21.1 percent of the unemployed.

The labor force participation rate declined by 0.2 percentage point to 62.8 percent in April but was unchanged from a year earlier. The employment-population ratio was unchanged at 60.6 percent in April and has been either 60.6 percent or 60.7 percent since October 2018.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 4.7 million in April. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or because they were unable to find full-time jobs.

In April, 1.4 million persons were marginally attached to the labor force, little different from a year earlier. (Data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 454,000 discouraged workers in April, about unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 963,000 persons marginally attached to the labor force in April had not searched for work for reasons such as school attendance or family responsibilities.

US Jobs April 2019 Industry

Establishment Survey Data

Total nonfarm payroll employment increased by 263,000 in April, compared with an average monthly gain of 213,000 over the prior 12 months. In April, notable jobs gains occurred in professional and business services, construction, health care, and social assistance.

Professional and business services added 76,000 jobs in April. Within the industry, employment gains occurred in administrative and support services (+53,000) and in computer systems design and related services (+14,000). Over the past 12 months, professional and business services has added 535,000 jobs. In April, construction employment rose by 33,000, with gains in nonresidential specialty trade contractors (+22,000) and in heavy and civil engineering construction (+10,000). Construction has added 256,000 jobs over the past 12 months.

Employment in health care grew by 27,000 in April and 404,000 over the past 12 months. In April, job growth occurred in ambulatory health care services (+17,000), hospitals (+8,000), and community care facilities for the elderly (+7,000). Social assistance added 26,000 jobs over the month, with all of the gain in individual and family services.

Financial activities employment continued to trend up in April (+12,000). The industry has added 110,000 jobs over the past 12 months, with almost three-fourths of the growth in real estate and rental and leasing. Manufacturing employment changed little for the third month in a row (+4,000 in April). In the 12 months prior to February, the industry had added an average of 22,000 jobs per month. Employment in retail trade changed little in April (-12,000). Job losses occurred in general merchandise stores (-9,000), while motor vehicle and parts dealers added 8,000 jobs.

Employment in other major industries, including mining, wholesale trade, transportation and warehousing, information, leisure and hospitality, and government, showed little change over the month.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.77 Over the year, average hourly earnings have increased by 3.2 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $23.31 in April.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.4 hours in April. In manufacturing, both the workweek and overtime were unchanged (40.7 hours and 3.4 hours, respectively). The average workweek for production and nonsupervisory employees on private nonfarm payrolls held at 33.7 hours.

The change in total nonfarm payroll employment for February was revised up from +33,000 to +56,000, and the change for March was revised down from +196,000 to +189,000. With these revisions, employment gains in February and March combined were 16,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 169,000 per month over the last 3 months.

 The Employment Situation for May is scheduled to be released on Friday, June 7, 2019, at 8:30 a.m. (EDT).

Other US April Employment Component Releases

US April ADP Employment Report

Total U.S. Nonfarm Private Employment: 275,000

By Company Size  Small businesses: 77,000 o 1-19 employees 32,000 o 20-49 employees 45,000  Medium businesses: 145,000 o 50-499 employees 145,000  Large businesses: 53,000 o 500-999 employees 20,000 o 1,000+ employees 33,000

ADP Apr Jobs 2019

“April posted an uptick in growth after the first quarter appeared to signal a moderation following a strong 2018,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The bulk of the overall growth is with service providers, adding the strongest gain in more than two years.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is holding firm, as businesses work hard to fill open positions. The economic soft patch at the start of the year has not materially impacted hiring. April’s job gains overstate the economy’s strength, but they make the case that expansion continues on.”

US March Challenger job cuts

Released by Challenger, Gray, and Christmas Inc - 4 April 2019

      • US March Challenger job cuts +0.4% v +117.2% y/y prior
      • Layoffs 60.59k Prior 76.84k
      • First quarter cuts totaled 190,410, 10.3% higher than the 172,601 cuts announced in the final quarter of 2018 and 35.6% higher than the 140,379 announced in the same quarter last year.
      • It is the highest quarterly total since Q3 2015, when 205,759 cuts were announced.
      • It is also the highest first quarter total since 2009, when 562,510 cuts were recorded.
      • Job cuts continue to pick up as the total in Q1 amounted to 190,410 - the highest quarterly total since Q3 2015.

“Companies appear to be streamlining and updating their processes, and workforce reductions are increasingly becoming a part of these decisions. Consumer behavior and advances in technology are driving many of these cuts,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

“Another major driver of the uptick in job cuts is economic uncertainty and fears of an upcoming downturn. Companies are reacting to market conditions as much as consumer demand,” he added. March job cuts were led by the Automotive sector, which announced 8,838 cuts. So far this year, automotive manufacturers and suppliers have cut 15,887 jobs. Energy companies followed with 8,149 planned cuts last month, for a total of 10,548 this year.

“Both Auto and Energy companies are pivoting in response to advances in technology and consumer demand for more efficiency. Companies in these sectors are attempting to attract talent who can compete with tech companies, like Apple and Tesla, which are beginning to compete in this space,” said Challenger.

The data provides information on the number of announced corporate layoffs by industry and region and acts as a general labour market indicator.

US Weekly Jobless Claims week ending March 30 2019

      • Initial jobless claims 202K vs 215K expected Prior 211K revised down to 212K
      • Continuing claims 1717K vs 1750K expected Prior 1755K
      • 4-week moving average 1,743,250, a decrease of 8,000 from unrevised 1,751,250 prior
      • Lowest level for initial claims since December 6, 1969 when it was 202,000

The largest increases in initial claims for the week ending March 23 were in Texas (+2,802), Arkansas (+821), Maryland (+330), Missouri (+324), and New Mexico (+160)

The largest decreases were in California (-1,296), Pennsylvania (-1,181), Oklahoma (-1,097), Wisconsin (-583), and Ohio (-468)

 

Source: AFP, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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