The Employment Situation report was mixed leaving traders scrambling to various sources to explain what the data means. However, one thing is clear, April was a big improvement over March.
The upshot is that the jobs report was strong enough to calm fears of a coming recession, without it being too strong to suggest the Fed will raise rates sooner than September.Source: www.fortune.com
Nonfarm payroll growth came in a soft 223,000. March was revised down from 126,000 to 85,000. Nevertheless, the unemployment rate fell to 5.4 percent from 5.5 percent, led by a rise in those finding jobs.
The construction sector showed a 45,000 increase. Professional business services added 62,000 jobs with temporary services up 16,000 for its best gain of the year. Gains in temporary services often lead permanent hiring higher.
The Employment Situation report showed a huge move higher from the previous (revised) low in March of 85,000:
I blasted Janet Yellen and the Federal Reserve last month on this report that clearly showed a worsening situation; however, this month that is not the case. We have a big move higher this month, something we did not have last month. The key level to watch is February’s 266,000 number. The Employment Situation report for May needs to break above 266K to bust the lower highs, and lower lows, and end the downtrend that began in payroll growth in November 2014.
It’s a bit of a relief; you see a nice bounce-off from March… Today we got a sign that we are getting a little bit of a bounce-back but it was far from a robust number.www.forbes.com
The big question is: does the Employment Situation report for April support the Federal Reserve’s thesis that the slowdown in Q1 2015 was just transitory and the economy will improve in later 2015? The report was mixed but I think we need to demand more than just April’s bounce to answer that question. One month does not a market make. What we can say is that the Employment Situation report is better than last month and while it may be short of supporting the Fed’s thesis, it does not disprove the Fed’s thesis either. Think about it. This report could have been a disaster had it showed April was even lower than March’s 85,000. HOWEVER watch out for next month’s revision to April!