NFP Report: Unemployment Leaps to 5.5%

Friday, June 06, 2008 | 09:30 AM

May_08_nfp
chart via BLS

>

The U.S. lost jobs for the fifth consecutive month, as nonfarm payroll employment continued to trend down. For May 2008, -49,000. Unemployment rose by 861,000 to 8.5 million, jumping half a percent to 5.5% -- the sharpest one month gain in 22 33 years. One year earlier, the jobless rate was 4.5%.

U-6, the broadest measure of Unemployment, jumped to 9.7%.

The Household survey showed employment fell by 285,000 while unemployment rose by 861,000 by the most in more than two decades. Bloomberg described this as "signaling that the world's largest economy is stalling."

Other noteworthy data points:

-The average workweek was unchanged at 33.7
-Average hourly earnings rose by 5 cents, or 0.3 percent, and up just 3.5% from a year earlier;
-Birth/Death model added 217k to the employed (not monthly) total  vs 174k in May '07. (meaning, expect further revisions lower in the future)
-BLS B/D estimated an add of  42k construction jobs, 9k financial jobs -- hard to believe in the current environment;
-Previous month revisions were lower by 15k;
-Unemployment rate jumped to 0.4% more than expected;
-The labor force rose, as reentrants (326,000) and new entrants (204,000) added to the labor force in May.

Expect the recent "no recession" consensus to come under additional pressure in the coming weeks. . .

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Sources:
THE EMPLOYMENT SITUATION: MAY 2008
June 6, 2008
http://www.bls.gov/ces/home.htm

THE EMPLOYMENT SITUATION MAY 2008.pdf (PDF)

CES Net Birth/Death Model
http://www.bls.gov/web/cesbd.htm

Friday, June 06, 2008 | 09:30 AM | Permalink | Comments (13) | TrackBack (1)
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» More on May 2008 Employment from The Big Picture
As a follow up to our NFP extravaganza yesterday, here are a few additional items you may find informative: Yesterday, we noted the big jump in Unemployment (a historic outlier) and wondered aloud whether it might be attributed to, in large part, a sea... [Read More]

Tracked on Jun 7, 2008 7:24:47 AM

Comments

Five months in a row does not make a trend.

Posted by: Douglas Watts | Jun 6, 2008 10:07:17 AM

The comments to this entry are closed.



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