• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Boock Report

  • Home
  • Free Content
  • Login
  • Subscribe

May 5, 2017 By Peter Boockvar

Private sector job growth a bit below forecasts


Non Farm Payrolls

April payrolls grew by 211k, 21k more than expected and partially offset by a downward revision of 6k in the two prior months. Much of the April upside was in the government as the private sector only saw a 4k person upside at 194k while March was revised down by 12k and February was revised up by 1k. Thus, taken together in the private sector, the total figures were a very slight miss relative to expectation. Within government that provided the upside, 17k were added and all in the state and local government side as the Federal Government shed 6k jobs.

The volatile household survey grew by 156k (of which 92k came from the important 25-54 yr old category) and because only 12k came into the labor force, the unemployment rate fell another tenth to 4.4% and the U6 rate was down a sharp 3 tenths to 8.6%. The 4.4% rate now matches the lowest level seen since the mid 2000’s. It got as low as 3.8% in April 2000. The U6 rate is the lowest since November 2007 and bottomed at 7.9% in that recovery. It was as low as 6.8% in October 2000. The participation rate did fall by one tenth to 62.9% and remains in a 4 month tight range and off the multi decade low seen last year.

The labor market is clearly tightening further here but it didn’t show up yet in the wage data as average hourly earnings were up by .3% m/o/m but from a one tenth downwardly revised March print to up .1%. On a y/o/y basis, wages were up 2.5%, two tenths less than expected but with a one tenth pick up in hours worked, average weekly earnings rose 2.5% too but that was the most since December. These are all still mediocre numbers but the continued fall in the unemployment rate is really laying the groundwork for a move higher in wages.

Within the job categories, after a sharp gain in construction in January and February due to the balmy winter, job growth was just 5k in April after a 1k print in March. Manufacturing job growth slowed to 6k, the least since November. After 2 months of sharp job losses, retail added 6k people. Leisure and hospitality, followed by education/health were the two biggest contributors to growth.

Bottom line, looking solely at the private sector, the 3 month job gain was slightly less than expected but the continued fall in the U3 and U6 unemployment figures locks in a June rate hike, I believe, as the Fed is very reactive. And looking at this and the inflation stats driving policy, they are now stretching the historical rubber band in terms of what this may mean for future wage growth. Smoothing out the recent track record has 3 month headline job growth average at 174k vs the 6 month average of 176k, the 12 month average of 186k, the 2016 average of 187k and vs 226k in 2015 and 250k in 2014. This is otherwise known as late cycle behavior as the supply of workers shrink.

Filed Under: Latest Data

Primary Sidebar

Recent

  • February 3, 2023 Succinct Summation of the Week’s Events
  • February 3, 2023 ISM better but breadth worse/S&P Global PMI still below 50
  • Subscribe
  • Free Content
  • Login
  • Ask Peter

Categories

  • Central Banks
  • Free Access
  • Latest Data
  • Podcasts
  • Uncategorized
  • Weekly Summary

Footer

Search

Follow Peter

  • Facebook
  • LinkedIn
  • Twitter

Subscribe

About Peter

Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.

Read More

Disclaimer - Peter Boockvar is an independent economist and market strategist. The Boock Report is independently produced by Peter Boockvar. Peter Boockvar is also the Chief Investment Officer of Bleakley Financial Group, LLC a Registered Investment Adviser. The Boock Report and Bleakley Financial Group, LLC are separate entities. Content contained in The Boock Report newsletters should not be construed as investment advice offered by Bleakley Financial Group, LLC or Peter Boockvar. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. The views expressed in this commentary should not be taken as advice to buy, sell or hold any security. To the extent any of the content published as part of this commentary may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. No chart, graph, or other figure provided should be used to determine which securities to buy or sell. Consult your advisor about what is best for you.

Copyright © 2023 · The Boock Report · The Ticker District Network, LLC

  • Login
  • Subscribe
  • Free Content
  • TERMS OF SERVICE