Highlights
Employment picked up sharply in April, as non-farm payrolls rose far beyond expectations with a gain of 274,000. Importantly, the data included a sharp net upward revision of 93,000 to March and February.

The data suggest a strong start to the second quarter and are certain to limit, if not quiet, concern that the economy, due to weak consumer spending and a slowdown in business investment, was getting stuck in another "soft patch."

The totals bring average monthly job growth to a solid 211,000 so far this year, beyond the rate of population growth and a respectable rate for an economic expansion. Industries showing strong gains in April included construction, retail trade and food services.

The average workweek posted its best reading since late 2002, rising 2 tenths to 33.9 hours and breaking the long, narrow trend of the series. The gain indicates that employers are working their labor forces harder, which may signal greater employment and greater capital investment in the months ahead.

Average hourly earnings were likewise very strong, at $16.00 up 0.3% compared to $15.95 in March and compared against $15.91 in February. The results are likely to feed concern that workers are muscling in pay increases. Yesterday's productivity data, though showing a solid 2.6% rate in the first-quarter, also showed a rising 2.2% rate of growth in labor costs.

The unemployment rate, based on the Labor Department's survey of households, was unchanged at 5.2%, though the unrounded figure, which is now a popular topic in the bond market, showed improvement, at 5.151% vs. 5.167% in March.

The rise in the household survey's labor force, which has been a disappointment for several months and which has magnified the effect of small gains in employment on the unemployment rate, rose very sharply, up a giant 605,000. Still, the nation's jobs market was strong enough to absorb the increase without hurting the unemployment rate.

Even showing sharp improvement was the key employment-to-population ratio, which measures employment as a percentage of the whole population, not against the size of the population's workforce, changes in which are often impossible to interpret. The ratio jumped 2 tenths to 62.6%. Though the ratio is still below levels consistent with prior rates of unemployment, the month's data point to future improvement.

Bonds, especially at the short end which are most sensitive to expectations of Federal Reserve policy, fell sharply in immediate reaction to the results. The dollar rallied sharply. The impact on the stock market is less certain, as income growth related to a stronger jobs market will be balanced by the rising risk of higher interest rates.

Interestingly, Challenger layoff totals and the monster employment index may have proved the best indicators for the month's gains. Weekly jobless claims were largely neutral while the ISM's employment indexes gave a false signal of declining growth.

Federal Reserve policy makers will have mixed feelings on this report. They will welcome the sharp improvement in job growth, but they will take a hard look at inflation pressures tied to a tightening labor market. The results are not likely to trigger new talk of 50-basis-point rate hikes, but are certain to raise suspicions that "measured" may soon be stricken from the Fed's policy statement. The data are also certain to make for an interesting day in the financial markets.

2005 Release Schedule

Released On: 1/7 2/4 3/4 4/1 5/6 6/3 7/8 8/5 9/2 10/7 11/4 12/2 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov