Bloomberg - Econoday Economics Stats - 5/6/2011

Employment Situation

Released on 5/6/2011 8:30:00 AM For Apr, 2011 Prior Prior Revised Consensus Consensus Range Actual Nonfarm Payrolls - M/M change 216,000  221,000  185,000  140,000  to 325,000  244,00  Unemployment Rate - Level 8.8 % 8.8 % 8.6 % to 8.9 % 9.0 % Average Hourly Earnings - M/M change 0.0 % 0.2 % 0.2 % 0.1 % to 0.2 % 0.1 % Av Workweek - All Employees 34.3 hrs 34.3 hrs 34.3 hrs to 34.3 hrs 34.3 hrs Private Payrolls - M/M change 230,000  231,000  200,000  165,000  to 350,000  268,000

Highlights Job growth surprised on the high side but there are still soft spots. Nonfarm payroll employment in April expanded a healthy 244,000, following a revised 221,000 advance in March and a 235,000 rise in February. The April gain topped analysts' estimate for a 185,000 advance. Also, the February and March revisions were up net 46,000. Private nonfarm payrolls were even stronger, growing 268,000 in April, following a 231,000 rise in March. The consensus forecast called for a 200,000 increase in April.  Gains were seen in goods-producing and service-providing sectors. Goods-producing jobs posted a 44,000 boost, following a 37,000 rise in March. For the latest month, manufacturing jobs increased 29,000 after a 22,000 gain in March. Even construction expanded though with a modest 5,000, following a 2,000 uptick the prior month. Mining jumped 11,000 in April. Private service-providing jobs increased 244,000 after a 194,000 rise in March. Trade & transportation was up 71,000 in April with 57,000 coming from retail trade. Other notable gains included professional & business services, up 51,000; health care, up 37,000; and leisure & hospitality, up 46,000. Government jobs fell 24,000, following a 10,000 dip in February. Wages were sluggish in April as average hourly earnings rose 0.1 percent, following a 0.2 percent gain in March. The latest figure came in lower than the median forecast for a 0.2 percent improvement. The average workweek for all workers posted at 34.3 hours, the same as in March and the consensus estimate.  On a year-ago basis, overall payroll job growth in April was up 1.0 percent, matching the prior month's pace. Turning to the household survey, the unemployment rate rose to 9.0 percent from 8.8 percent in March. Today's report is notably positive on balance. Equity futures rose on the news.

Market Consensus Before Announcement Nonfarm payroll employment in March gained 216,000, following a revised 194,000 increase in February and a 68,000 rise in January. Job gains were seen in both goods-producing and service-providing sectors. Private service-providing jobs increased 199,000 after a 167,000 rise in February. The biggest negative in the employment report was for wages as average hourly earnings for all workers were flat, matching February. Another disappointment was the average workweek for all workers which posted at 34.3 hours and showing no improvement from February. From the household survey, the unemployment rate edged down to 8.8 percent in March from 8.9 percent the month before.

Definition The employment situation is a set of labor market indicators based on two separate surveys in this one report. Based on the Household Survey, the unemployment rate measures the number of unemployed as a percentage of the labor force. Other key series come from the Establishment Survey (of business establishments). Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls.  Why Investors Care

During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month. Data Source: Haver Analytics

The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy. Data Source: Haver Analytics

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