First Friday of the Month

Not much has changed, though there are indications of trouble ahead, with a slight decrease in job creation, and the unemployment rate unchanged. 

The U.S. labor market showed signs of resilience in May, with employers adding 139,000 jobs amid economic uncertainty that has caused some employers to pause hiring.

The unemployment rate held steady at 4.2 percent, remaining near longtime lows, according to a jobs report released Friday by the Labor Department. 

The May labor market data beat forecasters’ expectations of 125,000 job gains and was relatively similar to April’s revised figures. The report offered a sound snapshot of an economy facing headwinds, as consumer spending has slowed.

It does seem a bit less positive when you get down into the weeds. 

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But the previous two months showed weaker growth than previously thought, with a combined 95,000 in downward job revisions. 

Quick math means that the monthly job growth after the revisions for the past two months is in the 90,000 range, which is rather anemic.

There is a bit of good news though, unless you are a sociopath or an economist.  (But I repeat myself)

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Average hourly wages accelerated, rising by 0.4 percent over the month, to $36.24 in May, as earnings continue to beat inflation in a boost to workers’ spending power. 

But more bad news follows: 

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At the same time, the labor market lost 625,000 people, with the share of adults working or searching for jobs dropping by 0.2 percent, in a sign of weakening labor supply. The decline partially reflects the exit of immigrants from the labor market. More than a million foreign-born workers have exited the workforce since March.

The bulk of job gains in May stemmed from a handful of service-based industries. Health care added some 62,000 jobs in May. Job creation also sped up in leisure and hospitality, with restaurants and bars adding 30,000 new jobs. Social assistance, which includes services for families, added 16,000 jobs.

Job growth was sluggish elsewhere. Some sectors showed signs of weakness that could be a response to higher trade levies. Manufacturing, retail, construction, transportation and warehousing lost or barely added jobs.

The federal government shed 22,000 jobs, a reflection of the Trump administration’s cuts, which have amounted to nearly 60,000 since January. The full scope of the cuts is still to be seen as many exiting employees remain on paid leave or severance, and are not yet counted as unemployment. State payrolls barely budged. 

Unemployment would likely have gone up .1% or .2% but for people leaving the labor force.

This is not going to turn out well.