The very modest 115,000 increase in non-farm payrolls in April will raise fears that the recovery is fading fast, just like it did at this time last year. We still think the true health of the labour market lies somewhere in the middle of the strength seen in the first two months of the year, when the average monthly payrolls gain was 267,000, and the weakness in the last two months, when the average gain was 135,000. Over the next couple of months we expect the monthly gains to settle back into a 150,000 to 200,000 range.
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