88,000 New Non-Farm Jobs in April, Unemployment Rate Still Historically Low at 4.5%, Hourly Earnings Still Substantiall Exceeding Inflation

- The Unemployment Rate for April rose to 4.5% versus estimates of 4.5% and 4.4% in March.
- The Change in Non-farm Payrolls for April was 88K versus estimates of 100K and 177K in March.
- The Change in Manufacturing Payrolls for April was -19K versus estimates of -14K and -18K in March.
- Average Hourly Earnings for April rose .2% versus estimates of a .3% gain and a .3% rise in March.

BOTTOM LINE: Employers in the US last month added fewer jobs and the unemployment rate rose slightly, Bloomberg reported. The unemployment rate ticked slightly higher, but still remains historically low and is down from 5.1% in September 2005, notwithstanding fewer real estate-related jobs and significant auto production cutbacks. The unemployment rate’s current 12-month average is 4.6%. It has only been lower during two other periods since the mid-50s. The economy has created almost 2 million jobs in just the last year. As well, the Monster Employment Index hit another record high in April. The 50-week moving average of initial jobless claims(318,700) has been lower during only two other periods since the 70s. Furthermore, most measures of Americans’ income growth are now almost twice the rate of inflation. Americans’ Average Hourly Earnings rose 3.7% year-over-year in April, substantially above the 3.2% 20-year average. The 10-month moving-average of Americans’ Average Hourly Earnings is currently 4.04%. 1998 was the only year during the 90s expansion that it exceeded current levels. I continue to believe the labor market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.