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By Jason Stipp | 05-03-2013 12:00 PM

Job Market Still Faces Headwinds

April's employment report was stronger than expected, but gains have been less broad-based recently, and we may have to live with a higher unemployment rate than we've seen in the past, says Francisco Torralba of Morningstar's investment management division.

Jason Stipp: I'm Jason Stipp for Morningstar.

We got the government employment report for April on Friday. It showed that 165,000 jobs were added to the economy. This was above consensus estimates.

Joining us to give his take is Francisco Torralba, an economist in Morningstar's Investment Management division. Bob Johnson, who normally joins this conversation, is out of the office today.

Thanks for joining us, Francisco.

Francisco Torralba: Glad to be here.

Stipp: So we did get above-consensus at 165,000. We also saw some revisions to prior months, February and March. What's your take on that number? Did it surprise you how good it was in April?

Torralba: I was surprised. I was expecting somewhere around 125,000, and like you said, the consensus was 135,000. So I was surprised.

I was especially surprised by the revisions to February and March, which altogether added 110,000, I believe, combined. So I think it was better than expected, I guess. But overall there are other factors kind of muting any optimism that one might have about the report.

Stipp: When we see prior months' revised in the way that they are, it's kind of important to look beyond just the one month's report.

So when you're looking at that 165,000 that we got, do you think that's emblematic of what we should be seeing, or maybe it looks a little too high for what we should see, if you were going to average it out over several months?

Torralba: It's been around average over the past 12 months, like you said, with a lot of variation from month-to-month, with lot of revisions. I wouldn't expect anything very different over the next nine months, through the end of the year--somewhere around 150,000 to 200,000 on average with a lot of variation.

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