WASHINGTON — The May employment report was largely as expected, allowing securities dealers to go back to worrying about whether moderate economic growth is enough to alter central bank policy any time soon.
May payrolls were up 175,000 and April-March revisions totaled a small 12,000 decrease. The 12-month average jobs gain is now up 172,000 a month. This illustrates that real economic growth remains in the average range at about 2%.
The May unemployment rate rose slightly to 7.6%, a rate that is still too high for comfort. Labor force participation and the number in the labor force edged up, but not by enough to alter the picture of many workers having left the market in the last few years. The unrounded advance in the rate was a bit over 4/100ths, enough to round up to a higher figure.
Hours and earnings rose slightly, so incomes and production should advance in upcoming reports.
Payroll composition: manufacturing 8,000 fell; construction rose 7,000 after a 2,000 dip in April, perhaps in a weather rebound; temporary help grew 25,600; healthcare increased 10,700. The month's largest gains again centered in weaker areas: retail soared 27,700, restaurants increased 38,100, and amusements rose 12,500. Some of these gains probably are a result of an early start to summer events in this 5-week survey period and could reverse.
Government jobs declined 3,000 overall but federal posted a 14,000 decrease as sequester effects and post office cuts continued. Local government was again hiring at a 13,000 rise as budgets improved.
Overall these data are no ball of fire, but are largely in line with expectations for continuing moderate growth.
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