After the abysmal March labor report, all we - and the Fed - can say is that April better be good, or else Yellen's claim of "transitory weakness" will simply be the latest nail in the coffin of Fed credibility. Here is the consensus for the key numbers the BLS will report at 8:30am ET on Friday morning.
Continuing Jobless Claims plunged to 1.962mm last week - the lowest since April 2000
(right before the Nasdaq started to collapse and the US fell into recession).
While ISM surveys show employment tumbling (and ADP was weak)...
initial jobless claims for the last week also collapsed back near its lowest levels since 1973.
"Full employment?"
US productvity has dropped for 4 of the last 6 quarters, plunging 0.6% in Q1 (dramatically worse than the 0.1% decline expected).
With unit labor costs up 3%, this is the biggest drop in productvity in 15 months and continues the stagnant trend within American workers.
After somewhat surprsingly surging to its highest levels since Dec 2014 in March (4 sigma beat), April ADP tumbled to 177k (and March was revised lower from 263k to 255k). This is the lowest growth in jobs since October 2016 - pre-Trump - with service-producing jobs gaining dramaticaly more than goods-producing (165k vs 12k).
The collapse in both ISM's Manufacturing and Services Employment sub-indices suggested notable downside for jobs in April and sure enough the ADP print corrected and was revised lower...
Authored by Charles Hugh-Smith via OfTwoMinds blog,
Everyone wants an abundance of "good paying" jobs, but employers can only afford to pay employees if the work being done is profitable.
What's abundant and what's scarce? The question matters because as economist Michael Spence (among others) has noted, value and profits flow to what's scarce. What's in over-supply has little to no scarcity value and hence little to no profitability.