Hiring springs back! but more gave up looking for work

Courtesy of CNBC by Patti Domm: Hiring springs back! but more gave up looking for work April’s big 288,000 jump in new jobs was good news for the economy, but the report sent mixed signals as an unusually high number of people dropped out of the labor force.

The unemployment rate dropped to a surprising 6.3 percent, from 6.7 percent, and the number of nonfarm payrolls was well above the 210,000 expected as jobs were broadly added in retail, construction, restaurants, and professional and business services.

March payrolls were also revised higher to 203,000. Stocks opened slightly higher.

Bond yields rose, but fell from initial highs. The 10-year yield was at 2.67 percent.

“It’s a good number but it’s not an all out economy full steam ahead number. It’s got its issues. Average hourly earnings were flat, weekly hours worked was flat and we had a fall in the labor force,” said John Briggs, head of cross asset strategy at RBS. “This drop to 6.3 percent is more of a wrong reason than right reason. … The bond market is tempering its selloff because the drop in the unemployment rate is due to a fall in the labor force, which on the initial read does not look related to structural issues,” he added

The civilian labor force fell by 806,000 after March’s increase of 503,000. The labor force participation rate dropped by 0.4 percent to 62.8 percent. This is a level economists were watching for an increase, which would have shown an improving trend for the workforce.

“It’s mixed news. What it is telling us is it’s confirming the weather was a factor. It’s telling us there’s hiring demand and people are getting hired, but it’s telling us it’s not enough to re-engage people,” said Diane Swonk, chief economist at Mesirow Financial.

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