Economy Watch: Jobs Report Solid, with Some Exceptions

The economy added 244,000 jobs in April; a commodity price index drops steeply; and consumer credit expands.

A number of drivers accounted for Friday’s unexpectedly strong jobs report from the U.S. Bureau of Labor Statistics, which said that the economy added 244,000 positions in April. Employment rose in a number of service-providing industries, manufacturing and mining. The private sector added 268,000 jobs, while the public sector lost them.

Since a recent low in February 2010, total payroll employment has grown by 1.8 million jobs. As during April 2011, the private sector has been doing the hiring over the last year or so in the face of public-sector contraction, adding 2.1 million jobs since February 2010.

Some categories of unemployed and underemployed didn’t change much in April, however. The number of people employed part time for economic reasons (“involuntary part-time workers,” as the BLS puts it) was little changed month-over-month, at 8.6 million. In April, some 2.5 million people were “marginally attached” to the labor force, about the same as a year earlier. That means they weren’t counted as unemployed because they hadn’t been pounding the pavement looking for work in the four weeks before the survey.

Among the marginally attached, there were 989,000 “discouraged workers” in April, a decline of 208,000 from a year earlier. Discouraged workers are people currently not looking for work, because they believe pounding the pavement is a waste of time for them, since no jobs are to be had.

Commodities tumble, but outlook for prices unclear

The commodity price contraction last week–everything from oil to coffee and especially silver–destroyed billions in market value as the S&P GSCI index, which tracks 24 commodities, dropped 11 percent during the week. That was the steepest drop in commodities since during the immediate aftermath of the Panic of 2008, when it was clear that demand for every kind of commodity would be dropping precipitously.

Still, it isn’t clear whether a commodities bubble really is popping, or whether it’s merely a bump in the road to higher commodity prices, which have been fueling inflation in the U.S. and other developed nations lately. Meanwhile, other countries are experiencing old-fashioned inflation, the kind an economy sees as it grows by leaps and bounds, such as in China, which reported an annualized 5.4 percent inflation rate in March.

Countries such as China are apparently developing their own ways of dealing with inflation–heavy-handed ways, as befitting a one-party state. For example, China’s National Development and Reform Commission, a generic-sounding name for an organ of economic central planning, said on Friday that it was fining consumer product giant Unilever a little more than $308,000. Unilever’s infraction? The company had said that it was planning to raise detergent and soap prices in China last month (though ultimately the government wouldn’t allow the increase). Talk isn’t cheap in inflationary China, it seems.

Consumer credit expands

The Federal Reserve said on Friday that consumer credit increased at an annualized rate of 3 percent in March, with revolving and nonrevolving credit increasing at a similar rate. During the entire first quarter of 2010, consumer credit also increased at an annualized rate of 3 percent.

Most of the monthly increase, which was the sixth one in a row, was driven by the likes of auto and student loans, which were up $4.1 billion. But there was also an uptick in credit-card use among consumers, to the tune of $1.9 billion, which might indicate–as the consumer confidence and sentiment surveys have been saying–that people really want to spend again, and now feel that they can get away with it, financially speaking.

Wall Street had a moderately good day on Friday, probably relieved that the jobs report wasn’t bad, with the Dow Jones Industrial Average gaining 54.57 points, or 0.43 percent. The S&P 500 was up 0.38 percent, and the Nasdaq advanced 0.46 percent.

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