Goldman Reports That NFP Was a Disappointment

They're right about this. Well said!

via Zero Hedge:

From Goldman Sachs
MAIN POINTS:
1. Nonfarm payroll employment increased by 244k in April, more than expected, and previous months were revised up by a net 46k. Stronger retail employment accounted for much of the acceleration: this sector added 57k jobs after losing 3k in March. Partly this may reflect seasonal effects due to the timing of Easter, but most reports from the retail sector have been strong, and we therefore think the number is mostly clean. Total service-providing employment growth accelerated by a smaller amount - to 224k from 194k - due primarily to weaker gains in temporary employment (the hiring event by McDonald's Corporation would have appeared in leisure and hospitality employment, which grew at a similar pace as in March). Good-producing employment gains were roughly in line with recent trends, with a sizable increase in manufacturing and small but positive growth in construction employment. Government subtracted 24k from total payrolls; total private employment rose by 268k - the largest monthly increase since 2006. We see some reason to believe that seasonal effects could have added a little to nonfarm payrolls, but this does not look to be the dominant reason for the strong result (see yesterday's US Daily for details).

2. Results from the household survey were disappointing. Total household employment fell by 190k, and the unemployment rate rose to 9.0% (8.96% unrounded) from 8.8% previously. Results were somewhat better after adjusting for methodological consistency with the nonfarm payroll data; on this basis the household survey measure of employment would have increased by 50k. However, the labor force participation rate was unchanged during the month, indicating that the rise in the unemployment rate reflected job losses rather than an influx of persons into the labor force. While the news was discouraging, it follows four months of declining unemployment, and the level of the unemployment rate remains down 1.1 percentage points from its peak. The employment-to-population ratio fell slightly to 58.4% from 58.5% previously.

3. Finally, average hourly earnings rose by 0.1% mom, slightly less than expected. However, growth in both February and March was revised up. The payroll gains and better growth in average hourly earnings - plus the sudden drop in oil prices - should support consumer incomes and spending later this year.

4. After the Employment Report, our Current Activity Indicator (CAI) showed growth of 2.3% in April, down from 4.0% in March. The deceleration mostly reflects weaker survey-based data (e.g. the non-manufacturing ISM and Philly reports), and indicates a cooling in overall growth early in Q2.