A Tale of Two Jobs Reports

Markets Focused on Geopolitics 

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…”  That last part sounds a bit reminiscent of the April Jobs Report released by the Bureau of Labor Statistics (BLS) on Friday. This week was packed with important employment-related economic data. Markets did glaze over much of it, as all eyes remain on the Iran conflict and potential peace deals. Once a resolution occurs, this data will become very important.   

JOLTS Report Hiring Improves 

The Job Openings and Labor Turnovers (JOLTS) report for March was released, showing 6.87 million job openings. This was a slight decline from February, but was in line with expectations. A little bright spot was the hiring rate, which rose from 3.1% (the lowest level since 2011, excluding COVID) to 3.5%. While this number is still historically low (a bad thing), the fact that it seems to be rising off the lows is a positive sign. There are other economic reports that seem to follow this bounce off recent lows. 

ADP Report Shows Job Growth 

One of those reports showing improvement was ADP’s April Employment Report. It showed that 109,000 jobs were created, beating most estimates. Despite the rebound, there are some potential cracks. Small businesses added 65,000 jobs. But Nela Richardson, the economist with ADP, said most of these available jobs were part-time and lower-paying jobs. Another56% of the jobs came from Education and Health Services, not an economically sensitive sector and it aligns with the aging demographics. 

New Home Sales Jump Higher 

New Home Sales data was released by the Census Bureau for February and March. This completed the “catch-up” from the government shutdown. Both months were much stronger than expected. February rose 9% monthly, and March rose 7.4% monthly for a combined 17% jump from January. This is despite the rise in interest rates in March.   

Revelio Payrolls Show Potential Turnaround 

Revelio Labs released its private payroll data for April. They showed that 66,000 jobs were created. This was more jobs created than the previous 6 months combined. Again, this could be a turning point. Fingers crossed! 

BLS Business Survey Beats Expectations 

As we have discussed in prior posts, the BLS Jobs report is actually two reports in one: the Business Survey and the Household Survey. The Business Survey gives the headline job creation number and came in at 115,000 jobs created in April. This was a good number. The non-seasonally adjusted number was a whopping 926,000 jobs created. A large part of this comes from the birth/death model that we have discussed repeatedly is not very reliable.    

The Household Survey gives the unemployment rate. This month it stayed at 4.3%.  It was a slight increase of .08 percentage points but rounding left it at 4.3%. This survey showed a job loss of 226,000 but also that 92,000 people left the Labor Force. If you look at people not counted in the labor force but who want to work, also known as the U-6, that rate showed an increase to 8.2% from 8.0% unemployment rate. 

Looking Ahead: We Get Inflation Data Next Week 

• Monday, May 11: Existing Home Sales 

• Tuesday, May 12: ADP Weekly, Consumer Price Index (CPI), 10-year Treasury Auction 

• Wednesday, May 13: Producer Price Index (PPI), 30-year Auction 

• Thursday, May 14: Retail Sales, Jobless Claims