The Employment Situation
Usually I describe the employment report as disappointing. But this one was just miserable.
Private sector employment only rose 69,000 and the unemployment rate ticked back up from 8.1%to 8.2%.
On a positive note, the household survey showed a gain of 422,000 and generally this series tends to lead the payroll data.
But the average work week fell from 33.5 to 33.4. In combination with the weak employment increase this generated a significant drop of 0.2% in aggregate hours worked. This reversed the recent strengthened in the index of hours worked as it fell back below the trend for this cycle.
Average hourly earnings rose less than 0.1% from $23.39 to $23.41. The year over year gain is back to an all time record low of 1.39%
With the drop in hours worked, average weekly earnings fell $806.96 to $805.30.
The unemployment rate rose for almost every category of workers. One of the exception was a fall in the unemployment rate for college graduates.
This is good right? I mean we cut another 15,000 public sector jobs… that’s good right? At some point the private sector will be happy we cut now some 650,000 public sector jobs and they will start hiring anytime now. Right?
maybe more bad news to come, too:
Announced U.S. Job Cuts Jump 67% From Year Ago, Challenger Says – Businessweek: Job cuts announced in the U.S. jumped in May by the most in eight months, led by computer companies. Planned firings surged 67 percent from May 2011 to 61,887, according to figures released today by Chicago-based Challenger, Gray Christmas Inc. It marked the fourth year-over-year increase so far in 2012. Employers have announced 245,540 reductions since Jan. 1, 20 percent more than a year earlier, the report said.
the goose was cooked back in 2010 when Obama made the deal with the devil that not only undermined social security but meant that we would not get our fiscal house in order. The obvious solution was more infrastructure spending, but the GOP will play the deficit card right up until Romney is sworn in when suddenly deficits won’t matter again and we will borrow and spend money to aid big business
Probably more like 100,000 jobs created. 61,000 in cuts is not impressive. Sounds like another inventory correction in the spring. Until it repeats in the 3rd quarter, I am not impressed. Overall demand is outpacing job growth. Which means hiring will move back up in Q3 unless the Euro mess spills over.
You people have got to stop freaking out after every little “soft patch” which even occurs in booms.
That isn’t impressive. You need well over 100,000 in job cuts to even begin to impress.
challanger just tracks the major announcements of coming layoffs…the guy that gets laid off tomorrow at the shop down the road from you wont show up here..
But he may never be laid off. It is only when the number goes over 100,000 that it begins to get serious.
Blogger intellectualism fail.
The job creation is certainly not spectacular. In the aggregate: PR as well as EPR are both up which explains the jump in U-3. NILF is down. People are optimistic and are looking for work.
What else does anyone expect when public policy is all about cutting governmnet jobs? No money, no demand. No demand, no hiring. Simple as that.
You think your interpretation is correct, fine, but why add a petulant tone and phrases like ‘you people’? It ruins your message if message is the intent…maybe not, maybe petulance is the message?
no intellectualism intended; i was just linking to a news story…
hey spencer, care to expound on how the number of those unemployed more than 27 weeks could increase 311K month to month while those unemployed 15 to 26 weeks only declined 220K?
Even worse, the number of people going on disabilty since June 2010 is HIGHER than the decline in unemployment.
Households reported a fair-sized rise in employment following 2 months of decline. One average for the 3 months, households report about 20k fewer jobs per month than the payroll survey. So if household jobs lead payroll jobs, I don’t think this is good news.
We are likely to see an up upward revision to productivity and a downward revision to unit labor costs for Q4, and pretty weak gains in unit labor cost in Q2, based on the payroll report and the national accounts data from earlier in the week. Disinflationary stuff.
Correction to the OP. Private sector job growth for May was 82,000(P). Non-farm was 69,000(P). Private sector growth was offset by govt. sector losses.
Something to think about:
The economy has been growing now for 11 straight quarters and has even made up all the ground lost from the recession having restored almost $861 billion in real GDP through Q1 2012 .. surpassing its pre-recession 2007 peak. The United States now churns out more goods and services than it did before the downturn began in 2007 .. and has generated almost 3.2 million private sector jobs over 27 straight months of net private sector employment growth through May 2012.
BUT, this economic output is being produced with approximately 5 million fewer civilian workers. Hummmm …