US: April jobs report indicates solid growth in employment – Nomura

In view of the research team at Nomura, US April jobs report exceeded expectations and showed strong gains (+211k total nonfarm, +194k private) and diminishing slack.

Key Quotes

“Although month-to-month changes this year have been blurred by the effects of the second-warmest winter on record, today’s numbers bolster the view that the 2017 job market continues to improve notably:

• Job growth has averaged 185k per month, and the household survey shows even stronger growth.
• Labor market slack is shrinking rapidly.

• The unemployment rate has fallen from 4.8% in January to 4.4% in April, the lowest reading since May 2007.
• The underemployment rate (U6) fell from 9.4% in January to 8.6% in April, the lowest reading since November 2007.

• The labor force participation rate has remained nearly constant, hovering between 62.9% and 63.0%, continuing to defy the negative effects of the aging population.
• Despite diminishing slack, average hourly earnings, though increasing 2.5% yo-y, are showing no signs of acceleration.”