After a week or so of pretty middling economic news – paltry GDP growth in the first quarter, continuing increases in applications for unemployment insurance and weakness in the ISM measurement of services sector strength – there was more than a bit of breath holding in advance of Friday's April employment report.
The breeze you felt was caused by sighs of relief. The official BLS line is that payrolls increased by 244,000 and the unemployment rate edged up to 9.0%. February and March employment gains were revised upwards so the trend for now is our friend.
This was another one of those reports in which the two components paint somewhat different pictures. David Leonhardt takes as good a stab as anyone at reconciling the divergence. Actually, he admits you can’t reconcile it and have to put the rise down to statistical noise. He has a point but there was enough in the household report to occasion some measure of pessimism.
Given all of this it shouldn’t be surprising that different analysts have different views. Here are a few worth checking out:
- Calculated Risk is always your first stop. Bill sees it as overall positive. Check out these two (here and here) separate posts of his and I’ll mention one more below.
- Dan Indiviglio does a good job looking at both the dark and light sides of the report. Lots of good graphs.
- John Carney isn’t so sanguine and notes that despite new job creation there are still 13.7 million people out of work and that U-6 jumped two-tenths of a percent.
- The WSJ Real Time Economics blog has its roundup of economists’ reactions to the news. Overall, they view it as a positive.
At the very least, this report goes against the grain of the more tepid economic news we have had over the past week. No doubt it does indicate some continuing improvement in hiring and by implication a continuing if maybe weak expansion of the economy. What it doesn’t do is provide any evidence that unemployment will be reduced in any meaningful way over an acceptable time frame.
To this end, I recommend this post in Calculated Risk. Bill McBride tends not to editorialize too much. Friday, he let lose with a little rant as part of a larger and important post. Essentially, he pointed out that not all the power brokers in this country are unhappy with elevated unemployment.
We have a jobs crisis and need some short-term and longer-term initiatives to deal with it. Right now it is as Mr. McBride says a “dirty little secret.”