Free Markets, Free People
I’m sure they’re “unexpected”:
Private-sector employment growth decelerated sharply in May, according to Automatic Data Processing Inc.’s employment report released Wednesday, in another possible sign of a sputtering U.S. recovery.
Employment in the nonfarm private business sector rose a seasonally adjusted 38,000 in May, well below the 175,000 increase expected by economists. In April, private payrolls showed an increase of 177,000, ADP said.
“This is exceptionally weak,” said Eric Green, chief market economist at TD Securities Inc. in New York.
“This was a dismal report, indicating a significant slowdown in job creation after six months of solid gains,” said Nicholas Tenev, economist at Barclays Capital Research.
“Sold gains?” Yeah, not so much. We’ve yet to hit the threshold of job creation – about 300,000 or so – necessary to tread water, much less be adding jobs. The gains we’ve seen in the past six months have been “positive” in that there were net jobs created, but 38,000 is about 10% of what we need per month to begin to chip away at unemployment.
The government will report its version of the numbers on Friday (the above is the ADP report):
On Friday, the government will report on U.S. nonfarm payrolls for May, data that also include government workers.
Economists polled by MarketWatch are looking for a gain of 175,000 in payrolls and for the nation’s unemployment rate to tick lower to 8.9% from 9.0% in April.
That would mark a slowdown from the healthy 244,000 jobs added in April.
It would also tell us that there is no real slowdown in hiring government workers, wouldn’t it – you know, despite “budget woes”, etc. And note too that we again, despite “a dismal report”, see economists saying the unemployment rate will “tick lower” to 8.9%? Yup, the Ministry of Truth is available to feed you whatever data you want to believe (which may explain why “improvements” in the unemployment rate don’t seem to boost consumer confidence at all). Again, not being at the “tread water” level with job creation, you have to wonder how the calculations are figured and what is being considered and not considered to anticipate the unemployment rate coming down in the face of “a dismal report”.
Dale has covered the real numbers for quite some time – well into double digits. But there is indeed a larger question out there – is the workforce actually shrinking and the old norms no longer the standard by which we should measure unemployment. I.e. are older workers looking at the job market and saying, “to heck with it, I can retire and I’m going too”?
Don’t know for sure, but regardless, the numbers from ADP remain “dismal” for May.