On the surface, the April jobs report was very strong. Not only were 288,000 nonfarm payrolls added, but the unemployment rate dropped from 6.7% to 6.3%. But unfortunately, the sizeable drop in the unemployment rate was largely the result of 806,000 people dropping out of the labor force. Additionally, the average length of unemployment remained above 35 weeks and no improvement occurred in April within the average work week or average hourly earnings, two closely watched labor market statistics. Furthermore, a large number of new jobs created in April were in low-paying industries including retail, restaurants, and hospitality. All of that said, despite some weakness within the details of the jobs report, the labor market continues to improve, albeit at a slower rate than prior post-World War 2 recoveries.
About that jobs report…maybe it wasn’t so great
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