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“Employment is nature’s physician and is essential to human happiness.” – Galen

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You’ve likely seen a few headlines this morning discussing the ‘rebound’ and ‘surge’ in regional bank stocks led by shares of PacWest (PACW) which are trading up 26% in pre-market trading.  Any staunching of the bleed in these stocks is welcome, but when PACW is only back to levels where it was trading at in the final hour of trading yesterday and still down over 60% on the week, it’s hard to call it a surge.

With bank stocks showing some stabilization, equity futures are taking the opportunity to rebound.  European stocks are all firmly higher this morning, and that comes despite what has been mostly a round of weaker-than-expected economic data as European Retail Sales, German Factory Orders, and Industrial Production in France all came in significantly weaker than expected.

With the Fed on Wednesday and Apple (AAPL) earnings after the close yesterday, you may have forgotten about today’s April Non-Farm Payrolls, but those numbers were just released.  Economists were expecting the total change in Non-Farm Payrolls to come in at 185K with the Unemployment Rate increasing to 3.6% from 3.5%.  The actual readings came in stronger than expected with payrolls increasing by 253K and the Unemployment Rate falling to 3.4%. Average hourly earnings were also two-tenths stronger than expected at 0.5% m/m.  One caveat to the stronger headline print, though, was that prior month readings were revised lower by about 150K.

The monthly payrolls report has been important because, in its quest to bring down inflation, the Federal Reserve has been on a mission to crush employment.  Because of that, the chart below continues to give members of the committee nightmares.  While other areas of the economy have clearly shown signs of rolling over, up until recently, employment has been humming along.  Recently, we have started to see some signs of cooling as jobless claims (after a major revision) have been trending higher while JOLTS has been rolling over, but the Non-Farm Payrolls report has been another story.  With this month’s stronger-than-expected print, we have now seen a record 13 straight months where the headline change in Non-Farm Payrolls was better than expected.

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