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Economic Update for the Week of 5/4/2012

115,000 jobs were added however the birth/death model (guesswork by the government) added 206,000 which means that we actually lost 91,000 jobs! Meanwhile the unemployment rate dropped from 8.2% to 8.1%. The drop in the unemployment rate is not because we added jobs, rather it is due to less people being counted because they are leaving the workforce.

Chicago PMI (Purchasing Manager's Index) came in at 56.2 which was well below expectations of 60.8. This number indicates a slowdown, but since it is above 50, is not a contraction. Factory orders fell 1.5%.

Earnings and hours worked remained flat for the month. In order to justify the need for additional employees, we need to see an increase in hours worked. Since these numbers are flat, it explains the jobs number indicated above.

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