Jobs data, a lot of confusing moving parts but friction growing
Payrolls in May rose a net 139k, 13k above expectations but the two prior months were revised lower by a combined 95k. There was a large decline of 696k jobs in the household survey but this data point really jumps around as it follows a gain of 461k in April, 201k in March and a drop of 588k in February. As this though matched the 625k person decline in the labor force, the unemployment rate held at 4.2% for a 3rd straight month.
Helping to explain the big drop in the labor force was this, the participation rate fell to 62.4% from 62.6% and that matches the lowest since December 2022. The participation rate for the key 25-54 yr old age cohort also fell two tenths m/o/m to 83.4% but after rising by .3% last month. Also, there was a big drop in the ‘job leavers’ category which is essentially a quits rate number and it measures leavers as a % of the unemployed. This fell to 9.8% from 11.8% and that’s the least since May 2021.
Private education/health continues to be the main driver of job growth, contributing 87k jobs and more than half of the 145k service sector jobs added. Leisure and hospitality added 48k so these two groups contributed to most of the service sector gains. Little job growth was seen elsewhere. Temp jobs of 20k were lost and they were too in the federal government by 22k, post DOGE.
Manufacturing shed 8k jobs while construction added 4k.
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