A Contrarian View of the Today’s Jobs Numbers

If the folks on Wall Street are so smart, why are they making happy about today’s jobs report?

As I write this post at 10:50 A.M., the DJIA is up 171 points- attributed to this “great jobs report.”

Here are some facts:

1) Nonfarm payrolls expanded 165,000 for April.

2) Headline Unemployment rate (U3) dropped 0.1 to 7.5%

3) Revisions of prior months’ reports were all positive and totalled ~114,000

On the basis of these facts, the Wall Streeters are “Making Happy.”

It's all good. Not so fast...

Making Happy!

Not so fast, Math Guys.

The average weekly hours in this report contracted from 34.6 hours to 34.4 hours.

No big deal right? A little more part-time employment, eh?

Here’s what Dr. Ken Mayland, blue chip economic forecaster has to say about this:

“The contraction of average weekly hours  from 34.6 hours to 34.4 hours  is almost a stunning reduction in the labor input into the economy. In very rough round numbers, holding workweek hours constant, this would be the equivalent of a 650,000 reduction in payrolls.”

“The labor input into the economy is down to the February level. In spite of a 0.2% pick-up of wages, average weekly earnings are down 0.4% — so the compensation portion of personal income will be weak.”

What the heck are those Wall Streeters thinking?

Despite the “jobs gains and positive revisions,” the real bottom line is that this is a – dare we say it- “dreadful” employment report.

Dreadful jobs report.

Dreadful employment report.

Photo credit A decade in the making
Photocredit Dreadful jobs report

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