EMPLOYMENT SITUATION
The employment report came in much as the ADP report had suggested it would. Payroll employment was little changed at 54,000. This is considerably weaker than over the last few months and is in line with other data that suggest the economy has weakened significantly.
The household survey reported that employment rose by 105,000 while the civilian labor force grew by some 272,000. Consequently the unemployment rate ticked back up to 9.1% from 9,0%.
Even with the uptick in the unemployment rate my fed policy index is still calling for a fed funds rate of 1.0%. This implies that the Fed should not renew QE II as the current easing ends.
The workweek was unchanged at 34.4 hours. So with the small gain in employment aggregate hours worked was only up 0.1%
Average hourly earnings rose by 0.3%, but the year over year gain in average hourly earnings is only 1.8% — a near record low.
With weak hourly earnings and only a 0.1% gain in hours worked average weekly wages are only up 2.7 % from a year ago. With the CPI at 3.1% as of April it should be no surprise that the economy is weak.
Nice run down on the NFP numbers. But you forgot to mention one important point.
The Birth Death model generated a total of 206,000 jobs in May. This is just a statistical adjustment having little to do with actual employment.
If you take out the B/D silliness the number of new jobs for the month actually fell by 150,000.
A discussion on this from the BLS:
http://www.bls.gov/web/empsit/cesbd.htm
It’s getting scary out there. Anyone seen the current/latest consumer confidence index?
“If you take out the B/D silliness the number of new jobs for the month actually fell by 150,000.”
Nope. The birth/death plug goes in before seasonal adjustment. The seasonal adjustment factor is generated on prior year’s data, which include the plug. If you take the plug out, you also take out the part of the adjustment based on the plug. There is no reason to think that the adjusted figure would be 206k lower if the plug were left out on a consistent basis. It would probably be somewhat lower, but we can’t tell how much without going through the adjustment exercise on data without the plug.
Certainly, the plug adds jobs over the course of a year, and so on average adds jobs every month, after seasonal adjustment.
Yeah. Apparently public concern that Ryan may actually get to destroy Medicare is really dragging down confidence.
CoRev,
Huh? What is broken is the discretionary side, which is spending more than the US is borrowing. Why fix what ain’t broken.
Raise general revenues. If you insist on keeping federal cash receipts short then kill the F-35 and roll the money to medicare.
Where is the plan to fix the F-35? Aside from ignoring failed performance of contract obligations?
KH and ILSM take a look at these numbers: http://www.urbaninstitute.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf
If you think these entitlements don’t matter (ILSM) are or don’t need to be reformed (KHarris) then you are probably a Democrat and at or near retirement. The best we have seen from Dems are demagoguery.
Since this is an article on employments/jobs leverage the above numbers with a high structural unemployment rate.
There is a lot of value in those medi and SS cash streams for “those people” who might otherwise be poor and under served.
No value to many people for the cash streams from the wasteful war stuff.
The F-35 has a ownership cost well over a trillion bucks over 25 years and it don’t work. Kill it.
The new super carrier, the US navy has all of them in the world, is using a mag-lev catapult which works like the F-35, and the first two ships are $35B. Kill them.
Don’t replace the Ohio Class subs.
The issue is not what a thing costs but what it is worth.
The outlay stream of medicare and SS are both better spent than the waste, fraud and abuse to provide empire security.
BTW what kind of humbug factory is urbaninstitute.org?
COREV — I made a suggestion about the discretionary side the other day but you did not seem to like it.
Remember, send all the air traffic controllers and the people at the Fed who clear checks home and see how the republican business class like that. Nex,t you can add the FEMA people that appear to be doing a much better job now than they did after Katrina. I’m sure I can add to the list of people that it would do massive damage to the economy if they were sent home.
You really sure you want to slice discretionary spending?
Half of Last Month’s New Jobs Came from a Single Employer — McDonald’s
According to the unemployment data released this morning, the economy added only 54,000 jobs, pushing the unemployment rate up to 9.1 percent. However, this report from MarketWatch suggests data is much worse than that:
McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted — in which 62,000 jobs were added. That’s not a net number, of course, and seasonal adjustment will reduce the Hamburglar impact on payrolls. (In simpler terms — restaurants always staff up for the summer; the Labor Department makes allowance for this effect.) Morgan Stanley estimates McDonald’s hiring will boost the overall number by 25,000 to 30,000. The Labor Department won’t detail an exact McDonald’s figure — they won’t identify any company they survey — but there will be data in the report to give a rough estimate.
If Morgan Stanley is correct, about half of last month’s job growth came from the venerable fast-food chain. That is hardly the sign of a healthy economy.
KHarris:
Ratio?
Question for Spencer:
A few days ago I read guest writer Mark Provost’s article, “Why the Rich Love High Unemployment,” from back on May 25, and some of the comments posted to it. In your exchange with run75441 in the comments thread, you criticized him for not treating as a labor cost to a purchasing manufacturer the cost of labor to the company that manufactured the components that purchasing company buys to use in manufacturing its own parts.
But run was talking about labor costs in the aggregate. And it seems to me that you’re double-counting the first company’s cost of labor. Yes, the cost of the first company’s labor is factored into the cost to the second company of buying the component part. But why do you consider the cost of labor to the first company and that same labor cost to the second company—that is, the cost of labor to the first company—when discussing aggregate labor costs in the economy?