HedgeFundLIVE.com — Today’s BLS Report not only beat the expectations by a wide margin but also printed a very good number on an absolute basis. This, in my humble opinion, is where the good news ends. There are quite a few reasons that one could argue that the report is not as good as it appears.
1) The birth death adjustment for the month was a positive 175,000 jobs. This compares to adjustments of 112,000 and 115,000 jobs added for the months of Feb and March, respectively. So, one could easily argue that some large percentage of the April payrolls number is imputed from statistics on the birth and death of companies in the month of April. In fact, I would argue that at least 60,000 of the 268,000 increase in private payrolls are phantom jobs and thus the number could be much closer to the expected 200,000 private adds.
2) Temp jobs deteriorated in the month of April quite significantly. Temp job adds went from positive 11,500 in Feb and positive 34,400 in March to a NEGATIVE 2,300 jobs in April. While this may not seem like a big deal on the surface, temp jobs are a very good leading indicator to future hiring plans so the deterioration could indicates weaker future payrolls numbers.
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