The true strength of the April Jobs Report was lost in last week’s reporting. Year-over-year growth in jobs accelerated, confirming our call for U.S. growth accelerating.
The New York Times wrote on Friday, “Job growth recovered in April, according to data released on Friday by the Labor Department, providing a reassuring economic snapshot after weak numbers in March.” But beyond the attention-grabbing decade-low in the unemployment rate and the 211,000 jobs reported for April, the report’s more subtle nuances were lost on mainstream media.
In this video excerpt from The Macro Show, Hedgeye Senior Macro analyst Darius Dale and Macro analyst Ben Ryan discuss the three most important trends the media missed:
- “Non-farm payroll growth actually accelerated to 1.56% year-over-year in April from 1.52% in March,” Dale says.
- “Aggregate hours growth accelerated to 1.71% year-over-year.”
- “Implied aggregate income growth accelerated to 4.24% year-over-year.”
“The key takeaway here is that consumption was a notable drag on first quarter GDP, but consumption is really starting to lag consumption capacity,” Dale says.
Something’s gotta give.
We’re betting that consumer spending picks up and provides a positive boost to U.S. GDP. The vast majority of the data we track confirms our prediction. Consumer Confidence is at all-time highs, the wealth effect (i.e. increased spending brought on by higher stock prices) is in full force, and inflation falling.
Watch the video above for more non-consensus insight and analysis from our Macro team.
