Friday, June 4, 2021
Nonfarm payroll numbers for May from the U.S. Bureau of Labor Statistics (BLS) came in well below expectations for the second-straight month. The Great Reopening, which was preceded by strength in the labor market which looks to be tapering off now that the “Good” Reopening is actually here.
A headline of 559K new jobs created last month missed the consensus of between 620-670K. The Unemployment Rate, however, tumbled 30 basis points month over month to 5.8% — the first five-handle of the pandemic era.
Not that 559K new jobs in a single month is “bad.” By any normal set of metrics, this would be very good, in fact. However, we currently still see 9.3 million Americans out of work — as compared to February 2020, when we had 5.7 million unemployed and a 3.5% Unemployment Rate. So we’re not chipping away at labor force difficulties at the pace many economists had foreseen.
Revisions for the past two months were modestly in the right direction: April went from 266K initially reported to 278K today; March grew to 785K on the headline from 770K originally reported. This amounts to a gain of 27K new jobs created in the past two months — not exactly enough to make up the gulf between monthly jobs projections and the actual results. That said, this morning’s totals will be subjected to (upward?) revisions in the next couple months.
Leisure & Hospitality brought in the highest number of new jobs, as expected: 292K last month, as the Good Reopening meets up with higher vaccination rates, pent-up demand and the first of the “warm-weather months.” Restaurants and bars made up 186K of this total. We’re still down 15% from February 2020 in the Leisure/Hospitality space, so expect this segment to lead the way in months to come, as well.
Elsewhere, Education (of all kinds: state, local and private) & Healthcare brought in 190K new positions filled for the month — also a nicely robust number. Transportation/Warehousing and Manufacturing brought in 23K each. The biggest disappointments came in Construction, -20K, possibly on higher input and labor costs, and Retail, which dropped 6000 positions in May.
Average Hourly Earnings grew nicely, +0.5% month over month (+2% year over year) to $30.33 per hour. The Average Workweek came in at 34.9 hours, while Labor Force Participation lagged disappointingly at 61.6%.
This number may be subjected to additional analysis, especially among those who believe government unemployment policies are keeping potential workers on their couches. Then again, a handful of states are ending their pandemic-era unemployment policies, so we’ll see if improvements are seen in the coming months there.
The longer this weaker-than-expected labor market narrative continues, the wiser the Fed looks in holding its fire regarding tapering bond buys and raising interest rates. Half the dual mandate is to bring about full employment, and as these numbers indicate, we still have a ways to go. At little more than half a million positions filled per month, it won’t be until the end of 2021 that we reach pre-pandemic levels in U.S. employment.
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5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
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BLS Jobs: 559K -- "Good" Reopening, Not "Great"
Friday, June 4, 2021
Nonfarm payroll numbers for May from the U.S. Bureau of Labor Statistics (BLS) came in well below expectations for the second-straight month. The Great Reopening, which was preceded by strength in the labor market which looks to be tapering off now that the “Good” Reopening is actually here.
A headline of 559K new jobs created last month missed the consensus of between 620-670K. The Unemployment Rate, however, tumbled 30 basis points month over month to 5.8% — the first five-handle of the pandemic era.
Not that 559K new jobs in a single month is “bad.” By any normal set of metrics, this would be very good, in fact. However, we currently still see 9.3 million Americans out of work — as compared to February 2020, when we had 5.7 million unemployed and a 3.5% Unemployment Rate. So we’re not chipping away at labor force difficulties at the pace many economists had foreseen.
Revisions for the past two months were modestly in the right direction: April went from 266K initially reported to 278K today; March grew to 785K on the headline from 770K originally reported. This amounts to a gain of 27K new jobs created in the past two months — not exactly enough to make up the gulf between monthly jobs projections and the actual results. That said, this morning’s totals will be subjected to (upward?) revisions in the next couple months.
Leisure & Hospitality brought in the highest number of new jobs, as expected: 292K last month, as the Good Reopening meets up with higher vaccination rates, pent-up demand and the first of the “warm-weather months.” Restaurants and bars made up 186K of this total. We’re still down 15% from February 2020 in the Leisure/Hospitality space, so expect this segment to lead the way in months to come, as well.
Elsewhere, Education (of all kinds: state, local and private) & Healthcare brought in 190K new positions filled for the month — also a nicely robust number. Transportation/Warehousing and Manufacturing brought in 23K each. The biggest disappointments came in Construction, -20K, possibly on higher input and labor costs, and Retail, which dropped 6000 positions in May.
Average Hourly Earnings grew nicely, +0.5% month over month (+2% year over year) to $30.33 per hour. The Average Workweek came in at 34.9 hours, while Labor Force Participation lagged disappointingly at 61.6%.
This number may be subjected to additional analysis, especially among those who believe government unemployment policies are keeping potential workers on their couches. Then again, a handful of states are ending their pandemic-era unemployment policies, so we’ll see if improvements are seen in the coming months there.
The longer this weaker-than-expected labor market narrative continues, the wiser the Fed looks in holding its fire regarding tapering bond buys and raising interest rates. Half the dual mandate is to bring about full employment, and as these numbers indicate, we still have a ways to go. At little more than half a million positions filled per month, it won’t be until the end of 2021 that we reach pre-pandemic levels in U.S. employment.
Questions or comments about this article and/or its author? Click here>>
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>