Global| May 07 2004U.S. Non-farm Payroll Growth in Gear
by:Tom Moeller
|in:Economy in Brief
Summary
Non-farm payroll growth in April of 288,000 surpassed Consensus expectations for a 175,000 rise. It was accompanied by upward revisions to payroll gains in both the prior two months. Since payrolls began rising last September the [...]
Non-farm payroll growth in April of 288,000 surpassed Consensus expectations for a 175,000 rise. It was accompanied by upward revisions to payroll gains in both the prior two months. Since payrolls began rising last September the monthly increase has averaged 139,000 and payrolls have risen 0.9%.
The one-month diffusion index for private non-farm payrolls slipped to 61.7% from an upwardly revised March reading of 64.0. This breadth-of-change measure has had an 86% correlation with the monthly change in employment over the last ten years. Readings above 50 are consistent with positive growth in payrolls.
Manufacturing sector payrolls grew 21,000 following upwardly revised figures for the prior two months. The last three months have been the best for factory sector hiring since late 1998. Gains were scattered across industries. The one-month diffusion index for manufacturing payrolls improved to 55.4% from an upwardly revised 51.9% in March.
Service producing payrolls jumped 246,000 (1.0% y/y). The gain was led by a 123,000 (3.0% y/y) rise in the professional & business services category including a 35,300 (12.1% y/y) rise in temporary help services.
Government sector jobs rose 8,000 (-0.1% y/y) but construction jobs were strong again, up 18,000 (2.8% y/y).
The index of aggregate hours worked (employment times hours worked) rose 0.3% and began 2Q 0.3% ahead of the 1Q average.
Average hourly earnings rose 0.3% (2.2% y/y) with a notable 0.4% (2.8% y/y) gain in factory sector earnings. Earnings in the financial as well as the information sectors also were strong.
From the separate household survey the unemployment rate fell to an expected 5.6%. Employment surged 278,000 (0.7% y/y) and the labor force rose 91,000 (+0.2% y/y). The labor force participation rate was unchanged for the third month at 65.9% versus 67.1% averaged from 1997-2000.
"Economic Policy Implications of World Demographic Change" from the Federal Reserve Bank of Kansas City can be found here.
| Employment | April | Mar | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Payroll Employment | 288,000 | 337,000 | 0.8% | -0.3% | -1.1% | 0.0% |
| Manufacturing | 21,000 | 9,000 | -1.9% | -4.8% | -7.2% | -4.8% |
| Average Weekly Hours | 33.7 | 33.7 | 33.6 | 33.7 | 33.8 | 34.0 |
| Average Hourly Earnings | 0.3% | 0.1% | 2.2% | 2.7% | 2.9% | 3.8% |
| Unemployment Rate | 5.6% | 5.7% | 6.0% | 6.0% | 5.8% | 4.8% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
