May Jobs: A Lousy Report
The only good thing I can say about the May Jobs Report is that at least we didn't lose jobs. That's it, though. The Labor Department said the US economy only added 54,000 jobs last month and the unemployment rate was up slightly to 9.1 percent.
The consensus estimate was for 150,000 new non-farm jobs to be created in April, and for the unemployment rate to tick down to 8.9 percent. So this report was a big disappointment. It feels even worse, because the news follows good reports in the prior three months, when job creation averaged 220,000 per month. Talk about one step forward, two steps back!
I know that everyone will be shouting from the roof-tops that "something must be done!" but let's think about the two viable options and whether they could do anything:
- Fed could launch QE3: I don't think the Fed will re-start its bond buying strategy when it winds down at the end of this month, because it's not clear that the action would create a significant boost to the economy. Investors might be happy, because the move would likely help asset prices, but the upside risk to inflation may be enough to prevent the Fed from keeping open this particular spigot.
- Politicians could renew some of last year's temporary tax cuts and credits: The heightened conversation about the nation's debt and deficit problems will likely trump any major government action that would spur this type of short-term economic growth.
May Jobs Report
- May Jobs: +54,000, fewest number of jobs in eight months
- May Private Sector Jobs: +83,000
- May Unemployment Rate: 9.1 percent, from 9.0 percent in April
- Under-Employment Rate (marginally-attached, part-time): 15.8 percent
- February, March and April average job creation: +220,000 per month
- Total Jobs created since April, 2010: 1.85 million
- Total Jobs created in 2011: 783,000 (157,000 per month)
- Number of years to return to pre-recession employment (assuming current level of 157,000 jobs per month): 4 (late 2014 or early 2015)
- Total Jobs Lost since beginning of recession in 2007: 6.95 million
- Unemployed persons: 13.9 million, from 13.7 million
- Long-term unemployed (jobless for 27 weeks and over): 6.2 million, from 5.8 million in March, which represents 45.1 percent of the total unemployed
- Part-timers (hours cut for economic reasons): 8.5 million
- Average Hourly Earnings: up $0.06 to $22.98 (Over the past 12 months, average hourly earnings have increased by 1.8 percent)
- Average Workweek: 34.4 hours
- Retail:-8,500
- Professional/Business Services: +44,000
- Leisure and Hospitality: -6,000 (after being up 151,000 in prior three months)
- Temporary Services:-1,200
- Health care: +17,000 (Over the prior 12 months, average of 24,000 jobs per month)
- Government: -29K (-28K at the state and local level, seventh consecutive month of job losses. 446,000 total government jobs lost since peak in September 2008)
- Manufacturing: -5,000 (after +250,000 since December 2009)
