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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

April Payrolls Bounce Back a Bit

After the very weak payroll jobs report for March, we got something of a bounce-back in April, with private-sector jobs rising by 183,000 and a modest, 9,000 downward revision to March. The jobs measure we track most closely, private-sector jobs less construction and retailing, rose 194,000 in April, following an 11,000 downward revision in March to a 77,000 gain.

With a really weak month followed by a better growth month, it is sensible to average the two months together. For the last two months, private-sector job growth averaged 143,000 per month, while our preferred measure saw average growth of 135,000. The latter is well below the 169,000 per month average we were seeing through the end of 2015. As the accompanying chart shows, job growth has been slowing for the past 15 months, and the last two months—together—continue that trend.

We have been emphasizing this point recently. The consensus view is that the slower, recent job growth is okay, because that is all we need to sustain full employment. At the same time, however, the consensus claim is that economic growth is picking up. How can you have overall economic growth picking up while job growth is slowing? You can’t.

So, whether or not recent job gains are consistent with full employment, they are clearly not consistent with accelerating economic growth. And with no acceleration in growth, it will be hard to sustain the increase in bond yields and stock prices that we have seen over the past eight months.

In terms of sector details, both retailing and construction have seen slower net job growth recently, retailing over the last seven months, construction over the last two. So, if anything, the ex construction and retailing measure we track portrays a more “constructive” picture than do the headline data.

Manufacturing payrolls had stumbled in March, but we saw a modest rebound in both factory production jobs and workweeks in April, so that gives hope that the factory rebound of the last five months is continuing. Overall, again, the April jobs report was decent, but it wasn’t as good as March’s news was bad.

Private-Sector Job Growth
Private-Sector Job Growth
Source: Bureau of Labor Statistics. As of 30 Apr 17

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 43 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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