By Thomas Cooley, Travis Cyronek, and Peter Rupert
The Bureau of Labor Statistics released the jobs report for May that was weaker than many had expected. Payroll employment increased 75k and, on, top of that, there were downward revisions for March (-36k) and April (-39k) totaling 75k. This report will likely do two things: (1) Stoke recession fears and (2) Further fuel expectations of a Fed rate cut. Since 2017 average employment growth is about 195k per month with a standard deviation of about 75k. So the 75k decline is nearly two standard deviations below the mean. As seen in the figure below, February employment numbers were also quite weak but bounced right back. However, two of the last four months have seen less 80k increases in payroll employment. In 2012 there were three consecutive months less than 100k.
There was weakness pretty much across the board with only the service producing sector showing any large increase, up 82k. The government sector shed 15k jobs so that the private sector ended up with a gain of 90k.
Average weekly hours remained at 34.4 for the second consecutive month. Average hourly earnings ticked up from $27.77 to $27.83, an increase of 0.2% and 3.1% year-over-year. With inflation so low, it means there are have real earnings gains over the last few years.
The household survey from the BLS showed an increase in employment of 113k and the labor force increased 176k. There was no change in the employment to population ratio or the labor force participation rate. The unemployment rate crept up slightly from 3.58% to 3.62%.
The Job Openings and Labor Turnover Survey shows that in every census region there are more job openings than unemployed workers.
Output per hour (productivity) increased 3.4% in the first quarter and unit labor costs fell 1.6%. In addition, the BLS has begun calculating productivity by state. North Dakota has seen the highest productivity growth since 2007, California next highest and Louisiana
