On the surface, April's jobs report was pretty bad -- the economy added 160,000 jobs for the month, unemployment stayed at 5.0% of the workforce and bonds rose quickly after the news came out, as traders bet even more heavily that the Federal Reserve won't raise interest rates this year.
But if you dig into the data a bit deeper, it wasn't all bad. In fact the news breaks down pretty neatly into the good, the bad and the ugly. The ugly part -- continued big job losses in mining, a category that includes oil drilling, as well as support fields -- are pretty familiar. The good parts are the progress on many of the most vexing issues of the sluggish recovery.
"It was disappointing but not a disaster," Moody's Analytics economist Ryan Sweet said. "April's weakness was concentrated in construction and retail, and both had very strong first quarters, so April is likely just payback. Trend job growth remains strong. The economy only needs to create 100,000 [jobs] per month to keep up with growth in the working age population."
-- Pay gains were pretty solid for the second month in a row, as average hourly compensation rose eight cents to $25.53. Median families have now recovered all of their recession-related losses and are within about 1% of all-time highs reached in the wake of the Internet boom. Including a separate gain in average hours worked, compensation is up 4.7% in the past year. Ultimately this money will be spent on everything from vacations at Marriott hotels (MAR - Get Report) to restaurant meals at Shake Shack (SHAK - Get Report) .
-- Discouraged workers. Remember the meme that the drop in unemployment wasn't real because so many people were too discouraged to even look? Forget it. The number of discouraged workers is down 188,000 in the last year, to 568,000. That's the lowest since October 2008.
-- Long-term unemployment is down. The number of people unemployed for 27 weeks or longer fell 150,000 to 2.06 million. People are getting back to work.
-- More unemployed workers say they are on temporary layoff and expect to be recalled.
-- The overall number is pretty bad, missing forecasts by 40,000. It could be revised upward, but it's a significant miss.
-- Construction employment growth was decidedly mixed. There were nice gains in residential construction, as builders like Toll Bros. (TOL - Get Report) and KBHome (KBH - Get Report) added 7,000 workers. Employment declined, however, in roads, bridges and other civil engineering construction projects, which support companies like Fluor (FLR - Get Report) . There was also a fluky 10,000-job drop in residential specialty contractors, who often work on renovations, which was inconsistent with strong earnings from Home Depot (HD - Get Report) and Lowe's (LOW - Get Report) . Combined, construction added just 1,000 jobs =- not great for a sector that's needed if the expansion is to move to another level.
-- Hurt by sluggish exports, uncertainty about the relative strength or weakness of China's economy and challenges in Europe,, manufacturing added only 4,000 jobs. There were drops in metals, machinery and textiles. Auto manufacturers like Ford (F - Get Report) and Tesla (TSLA - Get Report) added 6,100.
-- Government employment. One reason expansion in that area has been so shaky has been the erosion of government employment, where employment in April declined by 11,000 jobs. Oddly, 7,900 were in the Postal Service alone. Write your own punch lines.
Add it up, and you get the advice of Regions Financial chief economist Richard Moody: "Take a breath. This is nothing more than noise which, if one looks at the underlying trend, changes nothing."