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US economy added 223,000 jobs in April

Chris McGrath/Getty Images

  1. The US economy added 223,00 jobs in April according to the Bureau of Labor Statistics.
  2. The unemployment rate fell to 5.4 percent.
  3. Economists had expected 230,000 jobs and a 5.4 percent unemployment rate, so this is basically right on target.
  4. The two previous months' jobs reports were revised downward, removing 39,000 jobs.

A very expected jobs report

Really the only unusual or exciting thing about this jobs report is how unusual it is for something so thoroughly expected and non-game-changing to happen. Adding a bit over 200,000 jobs a month is both what analysts thought would happen, and also a trajectory that is consistent with a continued slow decline in unemployment but no real labor market boom.

Dive deeper into the data, and the basic lack of surprises only continues. Labor force participation is up, but only very slightly. Hourly wages are up, but only very slightly.

There's nothing about this jobs report that is likely to change the Federal Reserve's mind about anything, and therefore no reason to expect financial markets to have any particular reaction. Those who think the Fed's current course is dangerously inflationary will keep thinking that. Those who (more correctly!) think the Fed's current course is unreasonably inflation-averse will keep thinking that, as well. Janet Yellen will keep thinking she's on the right track.

Wages are very slightly growing

Wage growth appears to have settled into a steady pattern that is somewhat better than what we saw at the depths of the recession, but far below what was considered normal before the recession. Partially offsetting this, overall consumer price inflation has been abnormally low for a couple of years now. There are also some compositional effects pulling average wages down as a large cohort of inexperienced 20-somethings have been entering the workforce.

Overall it is a little difficult to understand why some of the small upward bumps have been interpreted in some quarters as a sign of an imminent inflationary breakout. Even the strongest wage-growth months have been weak compared with 2006 or 2007, years that were not exactly halcyon days for the American worker.

The economy is still not fully recovered

Perhaps the clearest sign of how not-yet-completed America's recovery comes from looking at the level of full-time jobs, which is still well below where it was in 2007:

The population, needless to say, has grown in the intervening years, meaning that the failure to fully catch up in job growth makes it difficult for rank-and-file workers to gain bargaining leverage.