Weak Growth, but Strong Job Creation
Today’s report is a head scratcher. The surrounding data suggested that job creation likely slowed in April, in part in response to higher energy prices and slower than expected economic growth. Instead, this is one of the stronger reports we have seen in this recovery, with long term unemployment down, upward revisions to previous months and only an uptick in the unemployment rate to break up the good news. Now we are left with signs of weak growth but strong job creation. We won’t see those two together for long, one of them will have to give. Since the jobs numbers are one of the more reliable signals, I would be inclined to be a bit more optimistic about growth going forward, especially if energy prices continue to decline.