The May Jobs Report is in, and the Fed Rate Hike will not be televised . . . The recession might be . . .
May Jobs Report – The Numbers
O-U-C-H! Not only were the numbers dismal, but March and April had revisions, downward. The Democrats press sycophants are constantly beating the "economy is great" drum, but it never seems to translate into actual statistics.
"U.S. employers added a seasonally adjusted 38,000 jobs in May, the worst monthly performance since September 2010—when the economy shed jobs. The latest number was well below the 158,000 forecast by economists. Over the past three months, employment growth has averaged 116,000, a big slowdown from the 219,000 average during the 12 months prior to May."
Slowdown, or meteor impact? Because this is a shocking decline.
The unemployment rate was 4.7% which is about full employment. The under employment rate was 9.7%. Work force participation fell to 62.6%.
Mish also took a look:
MishTalk | Mish's Global Economic Trend Analysis
Mish notes there were downward revision in employment for the last two months as well as the deep drop in May.
"The change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for April was revised from +160,000 to +123,000. With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 116,000 per month.
The household survey was worse. Employment rose a mere 26,000. That is on top of a decline last month of 316,000.
Adding insult to injury, part-time employment for economic reasons soared by 468,000.
The unemployment rate declined to 4.7% because a whopping 458,000 people dropped out of the labor force."
Weak numbers, weak report, substantial negative revisions, we agree with Mish, no June Fed Rate hike.
MaxedOutMoma is even more direct.
"The monthly employment report could not be worse, and will rebound next month, but only to very disappointing levels. One of the special factors causing the "shock" factor in this report are probably Texas floods, with manufacturing and transportation delays. But a great deal of it cannot be blamed on special factors. The Verizon strike doesn't have anything to do with it."
We agree, this is an ugly report.
"What is happening is that services are slowly downturning to follow manufacturing. Manufacturing is not pulling out at all.
Temporary help services was quite negative at -21,000. Generally this doesn't predict strong performance over the next few months.
Rail intermodal has been highly negative for several months. The CMI business to business credit survey (see page 6; look at the graph) shows that services are following manufacturing, with some more to go.
The June rate hike (snicker) is off the table. It always was.
The collapse in the worst-of-the-worst subprime auto issues has a little to do with this, but the basic problem is that the growth impetuses are all slowly fading. Inventory pile-ups have been forecasting this for quite some time.
Nothing I am seeing in any reports changes my assessment. We are in the first stages of a European-style business-led recession. It will be long and slow."
We remain optimistic that an actual recession can be avoided, but the Fed, and the government are not really helping. We have too much regulation of business, and individuals, and this results in business doldrums. We do not believe it would take much to jump start growth, but what needs to be done, is antithetical to the progressive mantra. It is the one thing they will not do. And, so, we are likely in the beginning phase of an unnecessary recession.
Again, we have not yet fully climbed aboard with the recession train, but it is becoming ever more difficult to argue contra.