the report

At 8:30 EST this morning, as usual,  the Bureau of Labor Statistics of the Labor Department released its monthly Employment Situation report.  The April figures, +165,000 net new jobs added during the month (+176,000 in the private sector, -11,000 in the public), are considerably higher than the +140,000 that economists had been forecasting.  They also run counter to the downbeat results of the quirky ADP monthly employment survey released on Wednesday.

the revisions

More important than the April numbers, I think, is the story that the revisions tell us.

Not all the participants in the Establishment Survey from which the employment figures are drawn get their data in on time.  So the monthly numbers are revised twice, once in each of the two months following their initial publication.

The revisions for April are as follows:

February figures:  initially reported as +236,000, revised in March to +268,000, revised in April to +332,000

March figures:  initially reported as +88,000, revised in April to +138,000.

Together, the revisions show that +114,000 more new jobs than we thought a month ago were created in February/March.  And the March figures, which seemed pretty awful in their original form, no longer look that bad–especially sandwiched between a blowout  in February and a healthy gain in April.

my take

This ES report is much better than anticipated.

You can make a case that the March/April dropoff from February’s spectacular job gains is the early effect of the sequester being felt–and that the negative effect of the sequester on the economy is not that bad.  There aren’t enough data to know whether this is true, but when has that ever stopped people from speculating?

Policymakers could take this thought and run with it in two different ways, something that bears monitoring.  Washington could argue to itself that there’s no economic need to undo any of the sequester    …or it could argue that undoing just a little bit (really, a lot of little bits) might bring disproportionately large job gains.  For now, I don’t want/need to decide about this.  My hunch, though, is that the latter path is the one Congress would take.

So:  the numbers are good for stocks, and they might lead to Congressional action (oxymoron?) that’s also good for stocks.  At the same time, continuing good jobs news would advance the day when the Fed begins to raise interest rates–very bad for bonds.