This is not the best report to see if you are graduating from college. The Labor Department reported the employment situation this morning. Unemployment came up to 8.2% versus 8.1% the prior month and versus 8.1% expected by both Bloomberg and Dow Jones this week. More talk of another recession is going to be more vocal this weekend.
It gets worse… The real disappointment was that the U.S. economy only created a dismally low 69,000 jobs. Estimates had been 150,000 and even higher than that earlier in the week. And to add insult to injury, March and April were revised lower by almost 50,000 jobs created as well if you tally the two months together.
The private sector created some 82,000 jobs, so it was another month of contraction in the government jobs due to the local and state budget constraints. Hourly earnings rose by 0.1%.
There was one small bit of good news here and something we have been very critical of. The labor force participation rate actually grew by 0.2% to 63.8% in May after hitting a multi-decade low in April. Still, the total number of unemployed grew by about 220,000 to right at 12.7 million.
Bond yields have hit yet another low on the news. The 10-Year Treasury yield just went under 1.5%, S&P futures are now down about 26 points, and oil is down over $3.00 per barrel.
Do you remember the term “Sell in May and go away!”?
The new normal…
JON C. OGG