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April Jobs Report

05/04/2012

Consistent with the April 19 “Initial Jobless Claims” blog update, my expectations for “weather payback” did, in fact, negatively impact the April jobs report, once again.
 
The April jobs report is disappointing and does nothing to alter my expectation that the market will continue extend the April churn within a sideways trading range. In the near term, expect the churn to test the lower end of the recent S&P 500® Index (SPX) range of 1335 to 1422 (Figure 1.1).
 
Additionally, the FOMC, in its effort to provide full transparency to the capital markets, has overplayed, in essence overtraded, its hand. Transparency is not apparent. Rather, extreme uncertainty is with regard to the introduction of further quantitative easing measures. Quite candidly, I suspect that even the FOMC is unsure how to handle the current economic data.
 
For investors, I emphasize not to make any major portfolios decisions within this uncertain environment. The “tug of war” will persist.
 
April Jobs Report Lowlights:
 
•   April change in Non-Farm Payrolls +115,000, well below the estimate for +160,000
•   March Non-Farm Payrolls was revised higher to +154,000 from +120,000
•   April change in Private Sector Payrolls +130,000, well below the estimate for +165,000
•   March Private Sector Payrolls was revised higher to +166,000 from +121,000
•   Unemployment Rate fell to 8.1% from 8.2% last month
•   Participation Rate fell to 63.6%, the lowest level since December 1981
•   Unemployment Rate remains above 8% since February 2009, the longest duration since 1948
•   Factory Payrolls rose +16,000, the least amount in five months 
  
Figure 1.1 SPX Sideways Range

Source: Bloomberg

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