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Economy in Brief

U.S. Payroll Hiring Is Firm But Jobless Rate Ticks Up
by Tom Moeller  May 6, 2011

Nonfarm payrolls increased 244,000 last month after a 221,000 March gain, initially reported as 216,000. The February rise also was revised up to 235,000 from 194,000. The latest gain exceeded Consensus expectations for a 185,000 increase. The unemployment rate rose to 9.0% compared to expectations for a further slip to 8.8%

From the establishment jobs survey, the 244,000 increase in jobs was the strongest since May of last year. Again, a rise in private service sector employment of 224,000 powered the increase. The increase reflected a 57,100 rise (0.7% y/y) in retail trade, a 51,000 gain in professional & business (3.1% y/y), a 49,000 increase (2.2% y/y) in education and health and a 46,000 rise (1.7% y/y) in leisure & hospitality. Temporary help services jobs slipped 2,300 (+11.0% y/y), the first negative month in three. Government jobs fell another 24,000 (-1.8% y/y) as budget shortfalls continued to force job cutbacks. Local government payrolls fell 14,000 (-1.8% y/y) while state payrolls were off 8,000 (-0.5% y/y). Jobs with the federal government slipped 2,000 (-4.4% y/y).

The household survey indicated a rebound in the unemployment rate to 9.0%. It remained, however, well below the high of 10.1% in October 2009. The overall unemployment rate, including those involuntarily working part-time, rose to 15.9% and retraced its March decline. Employment fell 190,000 (0.2% y/y) while the civilian labor force inched up 15,000 (-0.7% y/y). The labor force participation rate remained at its recent low of 64.2% versus the high of 67.1% roughly ten years ago. The average duration of unemployment slipped to 38.3 weeks from its record of 39.0. The number of those unemployed for more than 27 weeks (-12.3% y/y) fell to its lowest since October 2009.

The private sector workweek in April remained stable m/m at 34.3 hrs. for the third consecutive month. Overtime hours rose to 3.3 hrs., the highest since February 2008.

The diffusion index of private sector employment, which measures the breadth of job increase, rose slightly to 64.6%. The factory sector index rose to 65.4% and made up part of its March decline.

Average hourly earnings beat expectations and rose 0.3% (2.1% y/y) after an upwardly revised no-change in March. A 0.2% increase had been forecasted. Earnings in the goods-producing sector rose 0.1% (2.1% y/y) while services increased 0.3% (2.0% y/y).

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.

Explaining the Recent Decline in the Unemployment Rate from the Federal Reserve Bank of Chicago can be found here.

Employment: (M/M Chg., 000s) Apr Mar Feb Y/Y 2010 2009 2008
Payroll Employment 244 221 235 1.0% -0.7% -4.4% -0.6%
       Previous -- 216 194 -- -0.5 -4.3 -0.6
  Manufacturing 29 22 37 1.7 -2.7 -11.6 -3.4
  Construction 5 2 39 -0.8 -8.1 -16.0 -6.1
  Private Service Producing 224 194 180 1.7 -0.1 -3.5 -0.2
  Government -24 -10 -26 -1.8 -0.3 0.3 1.3
Average Weekly Hours 34.3 34.3 34.3 34.1
(Apr.'10)
34.2 33.9 34.5
Average Hourly Earnings 0.3% 0.0% 0.1% 2.1% 2.4% 3.0% 3.8%
Unemployment Rate (%) 9.0 8.8 8.9 9.8
(Apr.'10)
9.6 9.3 5.8
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