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US: Decline in payrolls softens somewhat in April

Mon, May 11 2009, 07:37 GMT
by KBC Market Research Desk

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In the US, the April payrolls report showed a job loss of 539 000, while the Bloomberg consensus was looking for a decline by 600 000. But the consensus was somewhat outdated as markets improved their expectations after recent developments in the ADP employment report. The February (-681 000 from -651 000) and March (-699 000 from -663 000) figures were significantly downwardly revised. Looking at the details, employment dropped by 270 000 in the goods-producing sector of which 149 000 in manufacturing. The improvement in the headline figure was mainly due to some progress in the service providing sector, where 269 000 jobs were lost compared to 381 000 in March, and in government payrolls, which added 72 000 jobs. The civilian labour force rose somewhat from 154.05M to 154.73M, while the number of people unemployed rose from 13.16M to 13.72M. The unemployment rate climbed to the highest level since September 1983 (8.9% from 8.5%), in line with the consensus estimate. Temporary help agencies, that often lead overall payrolls changes, dropped by another 63 000 (from -72 000), while education and health, non cyclical sectors, added 15 000 jobs (from 10 000). Average weekly hours worked stayed unchanged at 33.2, while the aggregate hours index dropped from 100.9 to 100.3. Although the report came out better than the consensus estimate, the outcome is a bit disappointing after the improvement in the ADP report and as previous figures were upwardly revised and part of the progress was concentrated in public sector payrolls (2010 Census). Also temporary help agencies showed no significant improvement.

EMU: German IP surprises on the upside

In March, German industrial production came out flat, while a decline by 1.3% M/M was expected. The February outcome was downwardly revised from -2.9% M/M to -3.4% M/M. Looking at the details, manufacturing and mining dropped by 0.4% M/M, while energy rose slightly (0.1% M/M) and construction showed the second consecutive improvement (7.6% M/M). After sharp declines in the previous six months, the flat outcome is another sign that the worst may be behind us.

Other: UK input PPI shows largest drop since July 2002, but output PPI rises

In the UK, output PPI rose by 0.6% M/M, while the consensus was looking for a more modest increase. Looking at the details, the increase was broadly based, but led by a 4.3% M/M increase in petroleum products. The yearly figure dropped to 1.2% Y/Y and also core PPI declined significantly from 3.2% Y/Y to 2.4% Y/Y. Input PPI on the contrary, declined to 5.0% Y/Y, the largest drop since July 2002.

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Published on  Mon, May 11 2009, 07:44 GMT

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