"Literally Shocking Data" – April Payrolls Miss Huge, Just 266K Jobs Added Below Expectations Of 1 Million
With expectations of today’s payroll print soaring, consensus expecting a whopping 1 million number and some forecasters calling as high as 2+ million, few were prepared for a miss (just 2 forecasters out of 79 were calling for a sub 800,000 print). And of course the market gods made sure to inflict the most possible pain on as many as possible, with the BLS reporting an April payroll of just 266K in April, a huge miss compared to the 1 million consensus estimate.
The miss was a 3.7 sigma miss to expectations, one of the biggest in recent history.
While the change in total nonfarm payroll employment for February was revised up by 68,000, from +468,000 to +536,000, the change for March was revised down by 146,000, from +916,000 to +770,000. With these revisions, employment in February and March combined is 78,000 lower than previously reported.
Commenting on the data, Bloomberg notes that the payroll data was "literally shocking" with the headline job growth of just 266k, an unemployment rate of 6.1%, and earnings growth of 0.7%" all speaking to a lack of low-skilled job additions." The figure was particularly weak given the revisions of -78k over the past couple of months
The unemployment rate also missed, printing at 6.1%, well above the 5.8% expected. Whites (5.3 percent), Blacks (9.7 percent), Asians (5.7 percent), and Hispanics (7.9 percent) showed little or no change in April.
With April’s modest increase, we remain about 8.2 million jobs below the pre-covid print.
The labor participation rate also disappointed, printing at 61.7%, above the 61.6% expected.
Another disappointment, if paradoxical, is that while the street was preparing for the first ever annual decline in hourly wages, the print was actually +0.3%, as fewer lower paying jobs were added. The average hourly earnings for all employees on private nonfarm payrolls increased by 21 cents to $30.17, following a decline of 4 cents in the prior month. In April, average hourly earnings for private-sector production and nonsupervisory employees rose by 20 cents to $25.45.
Not helping the hourly earnings print was an increase in the actual number of hours worked: the average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 35.0 hours in April. In manufacturing, the workweek and overtime were both unchanged over the month, at 40.5 hours and 3.2 hours, respectively. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.4 hours.
Broken down by sector, in April, notable job gains in leisure and hospitality, other services, and local government education were partially offset by losses in temporary help services and in couriers and messengers.
Curiously, the White House had already planned a high-level response to this report. Joe Biden is meeting with his economic team and Treasury Secretary Janet Yellen will be attending the White House press briefing later today. It will be interesting to see how Biden spins this huge disappointment, which if nothing else, will allow the Fed to avoid taper talk for at least a few more months.
As for markets, the initial reaction is that bad news is good news, with tech stocks soaring as the short squeeze we warned about yesterday is in full force.
Tyler Durden
Fri, 05/07/2021 – 08:34
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