May Payroll adds totaled only 54k, well below expectations of 165k and the private sector added just 83k jobs vs the consensus of 170k but the 83k compares closely to what ADP reported on Wednesday of 38k. Also, the prior two months were revised lower by 39k. The household survey said 105k jobs were added while the labor force rose by 272k, thus bringing the unemployment rate up to 9.1% from 9%. The all in rate fell .1% to 15.8%. Manufacturing unexpectedly shed 5k jobs, the 1st time since last Oct. The services sector added 80k jobs, down from 213k in Apr as retail lost 9k jobs. The decline in gov’t jobs was almost all at the local government level. Average hourly earnings rose .3%, encouragingly .1% higher than estimated and the average workweek rose a touch. Discouragingly, the average duration of unemployment rose to 39.7 weeks from 38.3, the most ever. Bottom line, disappointment sums it up well as the US economy cannot gain any self fulfilling growth where production growth/services lead to job gains/income growth which leads to demand for goods and services which lead to more production/services.

Category: MacroNotes

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