On the April Jobs Report, and the Boom Year of Living Joblessly

The Court of International Trade struck down Trump’s Section 122 tariffs, striking a pro-growth blow for lower taxes. 115,000 net payrolls beat the consensus for 65,000 and broke the 11-month streak of alternating monthly payroll gains and contractions. But over the last 12 months there have been only 251,999 payrolls gained. It is because of the hard-stop of immigration and some degree of deportation, and the run-off of federal employment  jobs to levels not seen since 1966. Yet over the same 12 months real private sector growth has been 3.44%. With hours worked slightly down, more than all of that is due to productivity growth. It has been reflected in 28.7% forward earnings estimate growth for the S&P 500, and a similar rally in stock prices. Despite having raised the bar, this earning season has had the third largest surprise factor in the history of the data. What can top that going forward? Oil prices returning to normal this year and at least one rate cut are potential upside surprises still to come.