Unemployment Rate Falls to 5.8%
May nonfarm payrolls rose 41,000, a bit lower than the consensus estimate of a gain of 65,000 jobs. It's worth noting that payrolls for April were revised down to a gain of only 6,000 from the increase of 43,000 jobs previously reported. Meanwhile, the unemployment rate bucked expectations for another rise, dropping to 5.8% from 6.0%.
Rounding out the report was the workweek holding at a revised 34.2 hours and hourly earnings climbing a modest 0.2%, which left earnings on a nonseasonally adjusted year-over-year basis rising at 3.2% -- a notable deceleration from the trends seen last year.
In the various sectors, jobs in goods producing industries dropped 23,000 due mostly to another 19,000 decline in manufacturing jobs. Despite the decline, this figure suggests that labor market trends in factories are continuing to improve.
Private service industries jobs rose a healthy 50,000, led by another healthy 25,000 gain in help-supply services. Finally, government payrolls rose a relatively modest 14,000.
Overall, while the benchmark revisions back to 1997 for the establishment data make for a more challenging read, the report on the whole continues to support the view that the rebounding economy continues to slow job attrition. S&P MMS says it would focus on the fact that payrolls hit a new post-attack level, manufacturing and related help-services continue to rebound, and the unemployment rate revealed a surprising drop. Nonetheless, the figures are non-threatening from the perspective of the Fed.
From S&P Global Markets and wire reports