On the April Jobs Report

A headline beat for payrolls, but a jobs contraction in the household survey and a contraction in the labor force. Hours worked have finally slightly exceeded the previous record before the pandemic – but the fact that GDP is 2.8% higher points to large and sustainable productivity gains. The unemployment rate was unchanged overall, but has now beat the pre-pandemic benchmark for blacks, Hispanics and high school only. Average hourly earnings growth was strong, but less strong than last month – the moderation the Fed’s script seems to be looking for (but not the contraction Powell’s off-script comments suggest). Amidst the mixed signals in this morning’s report, we don’t see anything that would cause either hawks or doves on the Fed to change their minds about anything,