Last month was revised down from an awful -92k to an abysmal -133k. Two-month revisions were -69k (bad even by revision standards).

Yet, we created 178k jobs in March!

Wait, it gets “better” (or weirder).

Hourly earnings dropped. Weekly hours dropped. Neither of those seem consistent with the strength in the headline number.

From the JOLTS data (which is 2 months old, so doesn’t capture “this month’s strength”) we had two very weak readings on two datasets that I trust more on jobs than most others – the QUIT and HIRE rates.

I view “QUIT” as “crowd sourced.” People in lower income jobs “know” if they can quit (for whatever reason) and find a new job – and people are not quitting. That makes me nervous.

While jobs outstanding, etc., have all sorts of issues (I continue to believe the data hasn’t properly figured out how to incorporate online job postings which seem to inflate jobs you can apply for online versus actual jobs available). The “HIRE” rate is harder to alter. It is as low as it was at the bottom of COVID hiring.

Yes, the unemployment rate ticked lower to 4.3% (which is good), but in large part, it was driven by the labor force participation rate dropping (negating some of the positive noise from the unemployment rate itself).

I will admit that it is curious (in a positive way) that the birth/death model showed -47k. Without that “model input” the number would have been higher.

Given government shutdowns, weather, and the conflict in Iran, I think we get “stuck” looking at the 3-month average which is 68k. Not strong enough to deter the Fed from being vigilant on labor with respect to potentially needing to cut. Not weak enough to show any signs of real economic slowdown (a bit surprising to me, given the conflict and affordability issues).

Bonds are right to sell off moderately on the headlines, but ultimately we will be going back to trading the conflict until we get clarity on that.

The jobs report was more strange than strong, which is my takeaway, and should not be relied upon too heavily in formulating your investing strategy.

DISCLAIMER