In May, non-farm payrolls fell by 49K, close to the estimated job loss of 60K. The average weekly hours worked stayed unchanged as well as the manufacturing hours, but the aggregate hours worked dropped by 0.1% M/M following a 0.4% M/M decline in April. Hourly earnings on the other hand increased with 0.3% M/M, up from 0.1% M/M previously, but given the surge in inflation, the rise in labour income is insufficient to stimulate spending.
Looking through the various sectors, the construction and manufacturing payrolls showed smaller losses than in previous months, but Professional services, which rose unexpectedly in April, registered again sharp losses, including at Help Agencies, the leader of overall payrolls. The diffusion payrolls slipped further below 50, indicating indeed broad-based losses. These figures were in line with the expectations, but nevertheless should be considered weak. Payrolls declined for 5 months in a row.
More surprising was the unemployment rate, which jumped from 5.0% to 5.5% against the expected 5.1%, the highest level since October 2004. However, these results are partially influenced by an extraordinary increase in the number of young people entering the labour force at the end of the school year and to the 5 week interval between the previous payrolls survey week, which might have impacted the seasonal adjustment. So, the risk is for the unemployment rate to fall (slightly) in the next months. Overall, the payrolls should be considered as disappointing, but not disastrous.
Looking through the various sectors, the construction and manufacturing payrolls showed smaller losses than in previous months, but Professional services, which rose unexpectedly in April, registered again sharp losses, including at Help Agencies, the leader of overall payrolls. The diffusion payrolls slipped further below 50, indicating indeed broad-based losses. These figures were in line with the expectations, but nevertheless should be considered weak. Payrolls declined for 5 months in a row.
More surprising was the unemployment rate, which jumped from 5.0% to 5.5% against the expected 5.1%, the highest level since October 2004. However, these results are partially influenced by an extraordinary increase in the number of young people entering the labour force at the end of the school year and to the 5 week interval between the previous payrolls survey week, which might have impacted the seasonal adjustment. So, the risk is for the unemployment rate to fall (slightly) in the next months. Overall, the payrolls should be considered as disappointing, but not disastrous.