Nonfarm payrolls -20,000 in April, well below both the previous month’s losses and consensus. Unemployment also unexpectedly fell from 5.1% to 5.0% (5.2% consensus). The surprising resilience in the labour market may signal that fears of a drastic slowdown are overblown in the near term.
Factory and construction payrolls contracted the most, with employers shedding 46,000 and 61,000 jobs each. The Service sector actually added jobs, as payrolls expanded by 90,000. Income growth, however, slowed to 0.1%, below 0.3% consensus. Bloomberg:
An average of 121,000 jobs a month were eliminated in the first four months of the 2001 recession, indicating that the current slowdown may be milder by comparison. Seven Federal Reserve interest-rate cuts and the arrival of government tax rebate checks may be enough to help consumers weather the slump in home values and jump in fuel costs.
“So far there’s a mild start to the recession,” Aaron Smith, an economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. ‘”The data we’ve been seeing is weak but it’s not deteriorating endlessly.”