It's the first Friday of the month, which means it is time for the Big Kahuna of economic data - the jobs report. So, without further ado, let's get to the report and review the bevy of numbers.

The big headline is the Bureau of Labor Statistics reported that Nonfarm Payrolls came in at 164,000 for April, which was below the expectations for 192,000.

As usual, there were revisions to the two previous reports. March’s job gains saw an increase of 22K to 135K (from 103K) while February’s job growth was downgraded slightly to 324K from 326K. In sum, the adjustments mean that the economy created 30K more new jobs than initially reported and that average job growth over the last three months stands at 208K.

The next big headline in the report was the nation’s unemployment rate, which came in at 3.9% for April and was better than the 4.0% estimate. Note that the current unemployment rate represents an 18-year low as the rate is the lowest since December 2000.

The drop in the unemployment rate was attributed to another decline in the labor force participation rate, which was 62.8% - the lowest level since January.

Since inflation is a concern these days, the average hourly earnings component of the report has been a key. The government reported that wages grew by just 4 cents, or 0.15%, in April, which was below analyst estimates for an increase of 0.2%. On a year-over-year basis, wages increased by 2.6%, which was a bit below last month's reading.

The average work week was unchanged at 34.1 hours.

The private sector created 168,000 new jobs last month.

The "U6," which represents a broader measure of unemployment due to the fact that it includes "discouraged workers," fell to 7.8% in April, which was the lowest seen since December 2001.

Markets haven't moved much on the news as the report doesn't appear to impact the Fed's current stance. Stock futures bounced initially but have since pulled back while the opposite is true for bond yields.

From the market's perspective, the good news is the current level of job growth is more sustainable than the blockbuster numbers seen in February and March. The bad news is this month's report has to be viewed as at least a little disappointing, which, of course, fosters the "slowing growth" narrative the bears favor at the present time.

However, it is important to note that while the nonfarm payroll data tends to be the driver of the day on Jobs Day each month, I'm thinking that any headlines relating to the status of trade talks with China will quickly become the focal point for traders today.

Thought For The Day:

You cannot push anyone up the ladder unless he is willing to climb. - Andrew Carnegie

Wishing you green screens and all the best for a great day,

David D. Moenning
Founder, Chief Investment Officer
Heritage Capital Research

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At the time of publication, Mr. Moenning held long positions in the following securities mentioned: none - Note that positions may change at any time.

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