Professional and business services added 75,000 jobs in April. Employment in this industry had increased by an average of 55,000 per month over the prior 12 months. In April, employment growth continued in temporary help services (+24,000), in management of companies and enterprises (+12,000), and in computer systems design and related services (+9,000).
It was a solid beat overall surpassing estimates calling for roughly 200,000 new jobs. We should be happy to see that more Americans are finding work. However, quantity isn't enough. For things to really improve there needs to be quality behind the payroll growth. Average hourly earnings went nowhere. Combine this with no increase in the average hourly workweek and the drop in the participation rate, it's cause for a bit of concern.
Interestingly, long-duration bonds aren't so sure about the strength of the number and after selling off immediately following the release, rose to a new high for the year. We are at one of those unusual junctures in the markets. Bonds have rallied this year, commodities are up, and many stocks and sectors are undergoing serious corrections, while at the same time the broad large-cap indices, like the Dow Jones Industrial Average, have held on strong. Past research shows that when Treasury bonds do well, we tend to have higher volatility in stocks right after strength has occurred. Of course this isn't always a guarantee, but the probability of continued volatility remains high.
