Keeping you up to date on the latest data releases.
Nonfarm payrolls rose just 69,000 in May, following a downwardly revised 77,000 (from 115,000) increase in April. March’s payrolls estimate was also nudged a little lower—from 154,000 to 143,000. Moreover, the downward revisions to March and April were entirely on the private payrolls side (revised down by 62,000) compared to a slight upward revision in government payrolls (adding 13,000). Payroll growth now looks to have slowed considerably from its average monthly gain of 226,000 in the first quarter. The recent fall-off in momentum does appear consistent with the story that first quarter performance was inflated by mild weather and mismeasured seasonals, which may take a little sting out of this report. Nevertheless, if we smooth over the last six reports, payrolls are just averaging a 174,000 gain per month. Goods-producing payrolls slipped by 15,000 in May, its first monthly decline since last August. That decline was due to a relatively sharp 28,000 decrease in construction payrolls. Manufacturing (of durable goods in particular) seems to be the one bright spot on the establishment side of this report. Manufacturing payrolls rose 12,000, roughly in line with its 12 month average gain of 19,000. Durables manufacturing rose 13,000, in large part due to a healthy boost (6,000) from autos manufacturing. Private service-providing payrolls rose 97,000, slightly up from an increase of 83,000 in April, but well below its first quarter average gain of 179,000.
Professional and business services employment looked particularly weak, falling 1,000 in May (despite a 9,000 boost from temp help employment), and contrasting its 12 month average gain of roughly 50,000. Also, leisure and hospitality payrolls fell for the second straight month, edging down 9,000 in May and breaking from its 12 month average gain of 25,000. Government payrolls, which have fallen in every month since July 2010, slipped down 17,000 in May. There was more bad news in hours and earnings. Average weekly hours edged down 0.1 hour to 34.4 hours in May, and are now down 0.2 hours after reaching a post-recession high (and even with its December 2007 level) of 34.6 hours in February. Perhaps the more striking development was the 0.3 hour decline in the average manufacturing workweek (from 40.8 hours to 40.5 hours), only its second decline of that magnitude since the end of the recession. Manufacturing overtime hours edged down 0.1 hour in May. Also, average weekly earnings slipped down 1.7 percent in May, its sharpest decline since last August. On the household side, the unemployment rate edged up 0.1 percentage point to 8.2 percent in May, as the civilian labor force jumped up 642,000 (more than reversing a 500,000 exodus over the previous 2 months), and outpaced a 422,000 rise in the number of employed persons. Reflecting the bounce back in employment during May, the employment-to-population ratio did rise 0.2 percentage points to 58.6, though that's still 0.8 percentage points below its level at the end of the previous recession (June 2009).