On the April Jobs Report

https://trendmacro.com/system/files/reports/20180504TrendMacroLuskin-3R.pdf
Donald L. Luskin
Friday, May 4, 2018
Payrolls weren’t really a miss. The unemployment rate didn’t really go down. Other than that...
US Macro
Federal Reserve
The seeming miss in today’s headline payrolls is entirely explained by upward revisions to last month’s anomalously weak report. But it should have been a beat, based on contemporaneous labor market indicators, and is likely to be revised upward next month. There would have been no gain at all in average hourly earnings if last month’s anomalously strong number hadn’t been revised lower. The downtick in the unemployment rate to the seemingly low level not seen since December 2000 was only because labor force participation shrank. There’s nothing here to make the Fed more hawkish. We believe there are still 1.4 million detached workers who could join the labor force, and that the economy is still 1.9 million jobs from full employment.