Impressive employment growth in May
The job Wall Street most urgently needs to fill right now is that of a taxidermist – someone to clean up and stuff all the pigeons that died in the wake of May’s jobs report.
U.S. employers added 272,000 workers in May.That’s well above the 180,000 or so economists had predicted. Private payrolls rose by 229,000, with the services sector adding an impressive 203,000 and the goods-producing sector adding a more reasonable 25,000.
Broad-based employment growth in the services sector
Employment gains were broad-based in the services sector. In some sectors, job gains were less impressive. Few signs of weaknessWholesale trade added 3,100 jobs, slightly higher than the average monthly gain before the pandemic. Wholesale employment is now about 6.2 million, well above the pre-pandemic peak of 5.9 million. Retail trade added 12,600 jobs, below the pace for the first four months of the year but above the pace for the second half of last year. Retail employment is also higher than before the pandemic.
Transportation and warehousing added 10,600 jobs, while public works employment rose for the first time since February. Companies serving U.S. consumers Confidence remains that growth will continue. This is expected to be a sign that retail sales will recover in May after a sluggish April, as retailers won’t continue to add employees if demand is weak.
Leisure and Hospitality Jobs The increase was 42,000. This is below the very high levels seen in 2021 and 2022, but is high by long-term historical standards. This growth is all the more impressive because the sector has surpassed pre-pandemic levels and no longer needs to play catch-up, another sign of robust consumer demand.
(Photo by k8townsend/Unsplash)
Not surprisingly, Information Work It leveled off after falling in April and remaining almost unchanged in March. It is important to note that this is a very small portion of the labor market, just 3.1 million workers, but it has received much more attention because it is seen as an engine of economic growth and innovation. Salaries increased significantly in the aftermath of the pandemic, but have since retreated to just above pre-pandemic levels.
Financial activities added 10,000 jobs, and professional and business services added 33,000 jobs. Growth in these services sectors indicates strong demand for services from households and businesses, Leading indicator of future demandThese new employees will inject income into the economy and contribute to growth.
The monetary side of the economy
Many of my Conservative friends will no doubt point out that the majority of the jobs were in the “government-related” sector, particularly health care and social assistance. These two sectors created 83,500 jobs. But even if we subtract this from the increase in private sector employment of 229,000, the true private payroll increase is still a respectable 145,500.
It is also important not to place too much emphasis on the divide between the private and public sectors. Government jobs and government related jobs Government employee incomes may not reflect the underlying state of the economy, but they do influence it. Government employee incomes still drive consumption and inflation. So while it’s reasonable to discount these jobs when looking at private sector worker demand, you shouldn’t discount them to see where it’s at. Growth and inflation It’s heading towards the near future.
The financial side of the economy continued to grow. construction A very impressive 21,000 jobs were added, showing that the long-awaited slowdown in the construction industry has not yet arrived. Manufacturing The 8,000 jobs added marked the biggest factory payroll increase since December, suggesting that the S&P Global Purchasing Managers’ Survey, which showed manufacturing growth for the month, was closer to target than the Institute for Supply Management survey.
The Fed is on summer vacation
The report was deleted Chances of a rate cut in JulyRegular Breitbart Business Digest readers may be surprised that some are still calling for a rate cut in the middle of summer, but there were still some big banks and investment firms, including Citigroup, that boldly stuck to their July rate cut expectations. They have now backtracked, with Citi pushing their cut outlook to September.
A rate cut in September is highly unlikely. Wall Street had been pricing in around a 75% chance of a rate cut, but now that probability could be below 50%. The earliest reasonable expectation of a cut is December, but there is growing confidence that even if economic conditions warrant a cut, the Fed will hold off to see how markets and the economy adjust to the results of the November election.
We have been saying for several weeks that the weakness in April’s numbers is likely “temporary.” The economy appears to have recovered in May.The employment data supports this view, and it is expected that Fed officials will not overlook it when they meet next week.
