Earlier this morning, the Labor Department reported that the economy added a strong 211,000 jobs in the month of April, above expectations for an addition of around 185,000 and a nice rebound from March's paltry figure (you can review our note on March's jobs report here). While the rebound in April is encouraging, the better performance was also largely expected, given March's uncharacteristically sluggish month (and bad weather, on which many blamed March's weak numbers).

The March report only looks more underwhelming today after the Labor Department revised numbers down to +79,000 from +98,000. Positively, however, February jobs were revised higher to 232,000 added from 219,000, although this is still a net loss of 6,000 jobs from the prior two months. Over the past three months, job gains have averaged 174,000. The economy has now added an average of 185,000 jobs per month in 2017, roughly matching last year's pace.

This jobs report was highly anticipated, not only due to the market's desire for a bounce back from March, but also because the Federal Reserve has maintained its relatively optimistic outlook on the economy, even despite recent data that has been largely disappointing. Earlier this week, the Fed decided to maintain benchmark interest rates following its May policy meeting, but committee members reiterated their hawkish tone, implying that recent issues were likely to be transitory and confirming the plan for gradual rate hikes moving forward (you can read our analysis from earlier in the week here).

Recall that the Federal Reserve has guided for two additional rate hikes in the balance of the year. Importantly, while there are still questions regarding the economy's consistent, yet struggling economic growth, this report should help assuage any fears that first-quarter softness would spill into the rest of the year. If nothing else, the confidence that businesses are showing in hiring should at least be reflective of an acceleration that these businesses are seeing (or expecting) on the top line. Expectations for economic acceleration into the second quarter and throughout the balance of the year support the slight move higher in the June rate hike probabilities, which now sit at above 80%, according to CME Group -- slightly higher than before the report was released.

Digging deeper into the report, the unemployment rate in March dipped again to 4.4%, down from March's 4.5% figure and better than expectations for 4.6%. This is the lowest level for unemployment since May 2007 -- a big accomplishment for the Fed, who tracks unemployment when making decisions regarding whether to raise interest rates. Although the lower unemployment rate is encouraging, we note that a smaller share of Americans participated in the labor force this month. The labor force participation rate (which accounts for the number of Americans looking for work or currently working) fell to 62.9% from March's 63% level. For historical context, the participation rate has steadily trended lower since a peak in 2000 (reflecting an aging population), but there has been incremental optimism in recent months that stagnation and some signals of uptick may indicate that some workers are coming off the sidelines, as confidence in the expanding economy increases. April's return to lower levels in the participation rate, however, may quell those expectations for now.

For those skeptical of the headline measure of unemployment (for reasons like the decline in the labor force participation rate), a different, broad measure of unemployment and underemployment known as the U-6 -- which accounts for those working part-time due to the inability to find full-time work -- was 8.6% in April (lowest since November 2007), down more than one percentage point from a year earlier and down from 8.9% in March and 9.2% in February. The U-6 had averaged around 8.3% in the years before the recession.

Wages were roughly in-line for April's report. The average hourly earnings of private-sector workers grew 2.5% in the 12 months through April, slightly lower than March's 2.7% 12-month increase. A decrease from the prior month could raise questions on labor competition and strength in the market. Overall, +2.5% year over year is steady, but unspectacular wage growth, suggesting the labor market might not be as tight as the unemployment rate would suggest.

The pace of wage raises has slowed since December's 2.9% increase. The slight disappointment is likely reflected in falling yields, which perhaps suggest that the market believes the Fed may not need an urgency to tighten. That being said, we know all too well that the data can change quickly, and we have more than half the year left to accelerate to levels where the Fed is comfortable raising rates two more times.

The last item we wanted to note is that the beleaguered U.S. retail industry actually added 6,300 jobs in April, after seeing two months in a row of large declines (retail lost 29,700 jobs in March and 31,000 in February). Job gains in April were fairly broad-based across sectors, demonstrating confidence in all areas of the economy.

Overall, the report was an encouraging rebound from March's number, but we still have questions left unanswered. As we noted in our analysis of March's report, both the new administration's policy actions and the Fed will remain in focus in the coming months, as each jive with the economic data released along the way. For now, the March report appears to be an outlier, solidifying general expectations for economic acceleration into the end of the year.