Jobs up 290,000; jobless rate rises to 9.9 pct.

Capital flows, not economic perceptions, are driving the markets. The direction of the stocks market does not always equal the direction of economic activity. The violence within the trends, however, illustrates this confusion.

More confident employers stepped up job creation in April, expanding payrolls by 290,000, the most in four years. The jobless rate rose to 9.9 percent as people streamed back into the market looking for work.

Job creation, despite the improvement from the lows, continues to lag labor force expansion. I use the job creation histogram (trend) to illustrate the marginal demand for labor relative to the labor force and circumvent the statistical massages that have crept into the unemployment rate calculation.

Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average:


This means the unemployment rate, now historically understated due to data revisions (recalculations), will continue to rise.

Historical Unemployment Rate (UR):


Source: finance.yahoo.com