Strong Deceleration of Job Growth in May
This morning, the Bureau of Labor Statistics released its national employment situation report for May. The report was underwhelming, with just 75,000 jobs created last month – well below the 180,000 jobs expected. Revisions to the prior two months decreased their strong performance by 75,000, leaving us with an average of 151,000 jobs per month over the last three months – an OK, but not great, pace.
The headline unemployment rate (U30 remained unchanged at 3.6%. The broader measure of labor underutilization (U6) declined 0.2 to 7.1%.
The lackluster job growth was spread across most sectors. No one sector showed a serious decline, but only health care and business and professional services showed notable gains.
Hourly earnings increased 3.1% year over year, although it missed estimates by a tenth of a point. The average workweek held steady at 34.4 hours in May.
Overall, this isn’t a great report, especially amid fears of a larger deceleration of growth and a possible recession in the near future. The headlines will likely suggest more weakness than is actually in the report, but in the context of other economic developments, this release should add to a cautionary outlook.
