**MNI 5 Things: US April Unemp Rate Drops To 3.9%; Jobs +164k>

--5 Things We Learned From The April Employment Data

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

April employment report released by the Bureau of Labor Statistics 

Friday: 

     - The payrolls data were a mixed bag, with payrolls growth and 

hourly earning growth softer than expected following a downward revision 

to the previous month, but the unemployment rate dipped to 3.9%, the 

lowest level since December of 2000. Despite this banner decline in 

unemployment, markets will likely be happy that payrolls growth and wage 

inflation are not running away from the Fed. 

     - Nonfarm payrolls rose 164,000, below the 185,000 gain 

expected. The whisper number was for a 183,000 gain. Likewise, private 

payrolls rose 168,000, compared with a 193,000 gain expected. An MNI 

analysis showed a tendency of analysts to understimate payrolls in 

April, with low misses in 7 of the last 10 years, but the forecast 

risk has been more balanced in recent years.

     - Hourly earnings rose 0.1% in the month (+0.149% unadjusted) after 

a downward revised 0.2% gain in March, so the year/year rate stayed at 

2.6% after rounding. Analysts had expected hourly earnings to rise 0.2% 

in the month following a 0.3% gain in March, so this data suggests some 

softness, though April's gain was very close to being rounded up to 

0.2%. Average weekly hours stayed at 34.5, so along with the payrolls 

gain, aggregate weekly hours rose by 0.1%. 

     - The unemployment rate's dip of 0.2% to 3.9% was facilitated by a 

decline in the participation rate to 62.8% from 62.9% in March. The 

unrounded rate was 3.929% for the current month's unemployment rate. 

Household employment was roughly flat, while unemployed plunged, so the 

labor force contracted. The alternate U-6 Rate fell to 7.8% from 8.0% in 

March.     

     - Payrolls in February and March were revised up by a net 30,000, 

reflecting a small downward revision to February and an upward revision 

to March. For April, there were solid gains for professional services 

(+54k), construction (+17k), manufacturing (+24k), and health care 

(+29k), but weakness from retail (+2k) and wholesale (-10k). 

     ** MNI Washington Bureau: 202-371-2121 ** 

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