employment report for April, released May 2, showed continued weakness in the U.S. labor market. Non-farm payrolls dropped 48,000 on the month, while the unemployment rate increased to 6.0% from 5.8%. These figures were not all that different from the consensus expectation.
The biggest disappointment in the report was the weakness in hours worked, which fell to 34.0 hours from 34.3 hours, leaving that measure back at its lowest level of the current cycle. Growth in hourly earnings remained very modest, rising only 0.1%, which left the series increasing at only a 3.0% non-seasonally adjusted year-over-year rate.
April job losses were dominated by manufacturing, department stores, and three travel-related industries -- amusements and recreation, hotels, and air transportation. This is right where you would expect the weakness and may be considered a good sign given that it was not more broad-based, which would suggest underlying conditions were deteriorating.
Nonetheless, there is little indication that conditions are getting better. In fact, the mix of data suggest another round of soft monthly numbers (e.g. industrial production, personal income) despite initial hopes that we would begin to see some rebound from the weather- and war-related weakness seen over the two prior months. The data will also likely heat up the debate regarding whether the Federal Reserve should ease again. From MMS International