Friday, June 1, 2018
Well, President Trump was sure looking forward to this morning’s jobs numbers, and it turns out he was right to do so: 223K new jobs for the month of May from the non-farm payroll BLS report was well up from the previous month — the downwardly revised 159K for April — and much higher than the trailing 3-month average of 179K. The new Unemployment Rate dipped even further, to 3.8% — the lowest we’ve seen since the turn of the millennium.
Average hourly earnings grew 0.3%, much better than the 0.1% gain we saw in April. Year over year, we see 2.7% growth in wage gains. This is still Goldilocks territory: not too hot, not too cold. The U-6, aka “real unemployment,” fell to 7.6% — the lowest in 17 years. The private sector brought in 218K new jobs last month — a better read than ADP’s (ADP - Free Report) reported 178K on Wednesday and the 162K from the previous month.
About the only negatives in this morning’s report was in Temporary workers, down 7K last month, but that could signal strength in full-time employment, which is far more desirable. Labor Force Participation ticked down 10 basis points to 62.7% — indicating that, incredibly, there is still some slack in this historically robust labor market. The average work week remained consistent at 34.5 hours.
The Retail industry led the way with 31K new hires in the month, with Healthcare, Construction and Professional/Business Services following closely behind. In all, we saw 171K new jobs in the Services sector. For another major positive, employment for African Americans, at 5.9%, is the lowest it has been since these numbers started being kept in 1972.
Of course, any drama concerning trade difficulties with our neighbors on the Western Hemisphere wouldn’t show up in any of these numbers, and even if they are to come to fruition in the coming months — and there’s as yet no guarantee that they will — it’s difficult to gauge whether they will have an immediate effect on the labor market. If you’ve been keeping with U.S.-based stocks, you’ve likely done well. If you’ve been acting on the president’s tweets, you may be doing even better.
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