It is nice to finally report that the employment report was encouraging as nonfarm payrolls rose some 290,000 in April. Even if the 66,000 temporary government employment for the census are excluded the job gains were significant.

Even the increase in the unemployment rate to 9.9% was actually a positive as it largely reflected individuals who had earlier dropped out of the labor market thinking things had improved enough that they resumed their job search.

Moreover, the index of aggregate hours work rose significantly and is up 1.8% from its October bottom.

Because of the rise in hours worked average weekly earnings are also rising nicely. But the increase in weekly earnings is almost all due to the increase in hours worked as average hourly earnings growth is still slowing. Of course this has positive implications for lower inflation and means that the Fed does not need to be in a hurry to tighten. Inflation does not appear to be a significant threat and the situation in Greece and other European debtors has significant deflationary implications.