May 2021 NFP = +559,000

The May jobs report is out. Last month, the U.S. economy created 559,000 net new jobs and the employment rate dropped 5.8%. Wall Street had been expecting 671,000 new jobs.

Let’s dig into some details. Private payrolls added 492,000 and manufacturing added 23,000. Average hourly earnings increased by 0.5%. In the last year, average hourly earnings are up 2%.

The average work week was 34.9. The labor force participation rate was 61.6%. The under-employment rate fell to 10.2%. The payroll gain for March was revised to 785,000. The number for April was revised up to 278,000.

The unemployment rate fell to 5.8% from 6.1%, which was better than the estimate of 5.9%. An alternative measure of unemployment that includes discouraged workers and those holding parttime jobs for economic reasons edged lower to 10.2%.

May’s letdown came after April sharply undershot expectations, with the upwardly revised 278,000 still well short of the initial 1 million estimate that came with high hopes for an economy trying to shake loose its pandemic shackles.

Markets were not disappointed by the report. Stock market futures actually rose, with investors continuing to bet that the measured pace of job gains would keep the Federal Reserve from raising interest rates and tightening monetary policy.

Diminishing Covid-19 cases along with a continued brisk pace in vaccines has pushed elected leaders to relax restrictions put in place to halt the spread of the virus. The economy grew at a 6.4% pace in the first quarter and is on track to accelerate at a 10.3% pace in the second quarter, according to the latest reading from the Federal Reserve in Atlanta.

Posted by on June 4th, 2021 at 8:34 am


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