Summary
Earlier this morning, the Labor Department released April employment data. The report indicated an unemployment rate that was unchanged at 4.7%. Meanwhile, payroll jobs increased a reported 138,000 during the month, well below expectations.
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* Today's release from the Labor Department indicated that the unemployment rate remained unchanged during April, at 4.7%. The report also showed an increase of 138,000 payroll jobs during the month.
* The consensus forecast was looking for the unemployment rate to remain unchanged at 4.7%, so this was right on target. However, the forecast for the increase in payroll jobs came in around 200,000, well above the actual 138,000 gain that was reported. Moreover, revisions to prior months' data resulted in a net downward revision of 36,000 jobs.
* The two components comprising each month's employment report are the household survey and the establishment survey (the latter also known as the "payroll survey.") The unemployment rate is derived from the former, making it a visible, highly sensitive number for political purposes.
* The payroll survey represents the number generally more important to the immediate behavior of the financial markets, although it also possesses a good deal of political importance. Today's report indicated job growth of 138,000 during April. This compared with a gain of 228,000 in payroll employment during April of last year.
* This morning's report contained net revisions that subtracted 36,000 from February and March payroll job creation. February went to +200,000 from +225,000, while March went to +200,000 from +211,000. Thus, including revisions, payroll employment over the last three months grew by 538,000 jobs, versus the 574,000 gain before the February and March adjustments. (During the same three-month period in 2005, payroll employment rose by 633,000.)
The following table breaks out the reported growth in payroll employment over the trailing three months, versus the same period in each of the prior five years.
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TRAILING THREE-MONTH PAYROLL EMPLOY-
MENT GROWTH (Thousands of Workers)
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Month 2006 2005 2004 2003 2002 2001
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Apr. 138 228 252 -68 -105 -295
Mar. 200 140 346 -199 -45 -47
Feb. 200 265 55 -149 -122 80
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Total 538 633 653 -416 -272 -262
=== === === === === ===
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* For the 12 months ended April 2006, payroll employment expanded by a reported 1.964 million jobs. This compared with an increase of 2.031 million during the 12-month period ended April 2005. Over the six-month periods ended April 2006 and 2005, reported growth was 1.191 million and 1.002 million, respectively.
* According to this morning's report, average hourly earnings registered a sharp nine-cent gain during April, or growth of about 0.5%, to $16.61. This compared with March's revised $16.52 (originally reported as $16.49), and with February's revised $16.47 (originally reported as $16.46).
* Year over year, average hourly earnings were up 3.8% as of April. This compared with a Consumer Price Index that rose 3.4% for the 12 months ended March (the latest CPI data currently available).
* During the 12 months ended March, the year-over-year gain in the CPI exceeded the year-over-year growth in average hourly earnings in all but two of those months (March 2006 and June 2005), exhibiting the longer-run loss of real purchasing power based on these particular series. And this is against a CPI that we (and the vast majority of others, too) believe is significantly understated.
* The table below contains the latest available results for key employment and inflation series. (NOTE: The new material contained in these tables will be posted to the "Data & Charts" section on the GRA website.)
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KEY U.S. EMPLOYMENT AND INFLATION DATA
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PAYROLL
UNEMPLOYMENT EMPLOYMENT AVERAGE HOURLY
RATE CHANGE EARNINGS
(%) (000s) ($s)
--------------- ---------- -----------------
Month Yr. Yr. Yr. Year/
/Year No. Ago No. Ago No. Ago Year
--------------- ---------- ------------------
04/06 4.7 5.1 138 228 16.61 16.00 3.8%
03/06 4.7 5.1 200 140 16.52 15.95 3.6%
02/06 4.8 5.4 200 265 16.47 15.91 3.5%
01/06 4.7 5.2 154 76 16.40 15.88 3.3%
=================================================
12/05 4.9 5.4 145 160 16.35 15.84 3.2%
11/05 5.0 5.4 354 133 16.28 15.81 3.0%
10/05 4.9 5.4 37 338 16.28 15.79 3.1%
09/05 5.1 5.4 48 177 16.19 15.77 2.7%
08/05 4.9 5.4 175 131 16.16 15.74 2.7%
07/05 5.0 5.5 241 38 16.14 15.68 2.9%
06/05 5.0 5.6 166 78 16.07 15.65 2.7%
05/05 5.1 5.6 106 267 16.03 15.63 2.6%
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EMPLOY. COST INDEX (%)* PRODUCTIVITY (%)#
----------------------- ------------------------
Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr.
----------------------- ------------------------
2006 0.6 <-----------> 3.2 <---------------->
2005 0.9 0.7 0.8 0.8 3.8 2.4 4.2 -0.5 2.9
2004 1.1 1.0 0.9 0.7 2.4 4.5 1.7 2.0 3.4
2003 1.3 0.9 1.0 0.7 3.8 6.3 9.8 0.5 3.9
2002 0.8 1.0 0.7 0.7 6.8 0.9 4.0 0.1 4.1
2001 1.1 1.0 1.1 0.9 -0.6 5.6 1.7 6.2 2.4
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2000 -1.8 7.4 -1.0 3.9 2.8
1999 3.6 0.7 2.7 7.1 2.8
1998 3.1 1.2 4.4 2.1 2.7
1997 -1.3 4.8 3.5 1.6 1.6
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CONSUMER PRICE INDEX## PRODUCER PRICE INDEX@
-------------------------- ---------------------
Month Yr. Year/ Yr. Year/
/Year Index Ago Year Index Ago Year
-------------------------- --------------------
03/06 199.8 193.2 3.4% 159.0 153.6 3.5%
02/06 199.1 192.1 3.6% 158.2 152.4 3.8%
01/06 199.0 191.4 4.0% 160.4 151.7 5.7%
================================================
12/05 197.7 191.2 3.4% 160.0 151.5 5.6%
11/05 197.8 191.2 3.5% 158.8 152.2 4.3%
10/05 199.1 190.8 4.4% 159.6 150.8 5.8%
09/05 198.6 189.7 4.7% 158.4 148.6 6.6%
08/05 196.2 189.4 3.6% 156.2 148.5 5.2%
07/05 195.1 189.2 3.1% 155.4 148.4 4.7%
06/05 193.9 189.2 2.5% 154.2 148.5 3.8%
05/05 194.0 188.6 2.9% 154.1 148.6 3.7%
04/05 194.1 187.5 3.5% 154.4 147.4 4.7%
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NOTE: All data are seasonally adjusted. *Total
civilian compensation, 3-month change. #Nonfarm
business output per hour, annual rates. ##All
urban, all items. @Finished goods.
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