Strong US Jobs Report, despite Rise in Unemployment

For the second consecutive month the US economy grew more than 200k jobs. The private sector has added 400k jobs in the March-April period. The unemployment rate ticked up to 9.9% from 9.7% as more than 800k people joined the work force. This looks like discouraged workers getting back involved and in some ways is a sign of returning optimism.

Hourly earnings did not rise, but the work week increased 0.1 which is roughly the equivalent of another 300k full time jobs in terms of output and income.

Manufacturing added 44k jobs, more than twice the expected level. This bodes well for industrial output and another increase in capacity utilization. Construction added 14k jobs and this may indicate steadier construction spending. Temp workers increased by another 26k. The overall data should set the tone for much of the April economic data and should reinforce the sense that a cyclical recovery is taking hold in the US.

Although the dollar's strength has been more a function of challenges elsewhere (see Europe or Chinese equities among the worst performers this year), positive domestic developments will also, arguably, support the greenback over time. The output gap in the US is closing albeit slowly. In Europe, the output gap appears to still be growing.
Strong US Jobs Report, despite Rise in Unemployment Strong US Jobs Report, despite Rise in Unemployment Reviewed by Marc Chandler on May 07, 2010 Rating: 5
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