There’s no positive spin that can be put on the May Employment report. It was a disappointment, pure and simple. The economy added a meager 69,000 jobs, much weaker than expected, and the April nonfarm payroll gain was revised sharply lower. The unemployment rate also reversed course, rising to 8.2%, its first uptick in nearly a year.
The optimism that had built around the jobs market early this year has taken some blows in recent months as job creation has fizzled. Today’s data will only stoke anxiety over the faltering jobs market. Job creation had been insufficient to materially improve job market conditions; we now know that it has slowed to the point that even holding the unemployment rate steady is at risk.
Broadly, there is increasing evidence that the U.S. economy is slowing once again, which is an ominous sign for job-seekers. Momentum outside the U.S. is largely negative, as much of Europe is now in recession and China appears to be slowing to a much greater degree than anticipated.
This was the latest in a string of faltering readings for the employment market. While jobs are still being created, the pace has faltered significantly since January and is dangerously low.
Reports of better job creation provided a big boost to consumer confidence earlier this year; it now appears inevitable that the evident weakness will be a blow to consumers. How will that translate to spending? The full impact remains to be seen, but it certainly isn’t going to help.
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