April non-farm payroll
The US April jobs report indicated a decent improvement in the labor market. April non-farm payroll employment in the United States (SPY) (SPXL) saw employers adding 211,000 jobs to the market in April 2017 compared to 98,000 in March. It was far above the market expectation of 185,000 jobs.
Key highlights of the jobs report
Jobs growth in April occurred mainly in the healthcare, financial services, construction, and mining sectors.
- The healthcare (XLV) sector added 37,000 jobs.
- Professional and business services added 39,000 jobs.
- The mining (XLB) sector added 9,000 jobs.
- Financial services added 19,000 jobs.
Impact on the economy
The labor market saw solid job growth in January and February 2017, but it had weaker growth in March. As we saw in an earlier part of this series, the major indexes in the United States (QQQ) (SPY) also had weaker performances in March.
Jobs growth in April is improving investor confidence. The expectation of tax reforms is growing, and if that happens, the United States (VFINX) (IWM) could see huge jobs growth, which could improve consumer spending. Higher consumer spending would move inflation higher. The Fed is focusing on the labor market, consumer spending, and inflation to determine any interest rate hikes. If these economic indicators continue their solid performances, the Fed might continue its gradual rate hike process.
In the next part of this series, we’ll analyze the performance of the US ADP employment report for April 2017.