Friday, May 6, 2011

Jobapalooza

Finally, a solid, kick-ass month for employment at first glance...but not all good news.  In fact, it's pretty lousy.

Employment increased more than expected in April as private companies created jobs at the fastest pace in five years, pointing to underlying strength in the economy, even though the jobless rate rose to 9.0 percent.

Nonfarm payrolls rose 244,000 last month, the most in 11 months, the Labor Department said on Friday. The private sector accounted for all of the job gains last month, with payrolls rising 268,000, the largest rise since February 2006.

The gain in overall payrolls, above economist expectations for a 186,000 increase, was supportive of views the economic recovery would regain speed this quarter after stumbling in the first three months of the year on high commodity prices.

Data for the previous two months was revised to show 46,000 more jobs were added.

The internals, though, were less encouraging.

The total amount of unemployed was unchanged from March at 13.7 million people.

The labor participation rate also was stuck at 64.2 percent, refuting the notion that the rise in the unemployment rate reflected more discouraged workers looking for jobs.

Also, the so-called real unemployment rate—which the government calls the U-6—which encompasses discouraged workers as well, actually rose in the month two-tenths of a point to 15.9 percent.

None of those last three numbers are good signs at all.  Remember, McDonald's added some 62,000 jobs...but those are minimum wage, part-time positions for summer.   May should be a good month too overall, but those other numbers are real head-scratchers.  We're back at 9.0% even after adding 244,000 jobs, which means the number of people who dropped out of the work force completely was significant.  In fact, Tyler Durden notes that minus the McJobs and the +175,000 birth/death adjustment by the department of labor, the number of other jobs created in the economy last month?

7,000.

We'll see.

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