Friday, June 2, 2017

"Economists React to the May Jobs Report: ‘Isn’t a Disaster’"

From Real Time Economics:
U.S. nonfarm employers added a seasonally adjusted 138,000 jobs in May, below economists’ expectations for an increase of 184,000. The unemployment rate dropped to 4.3%, the lowest level in 16 years.

Here are early reactions from economists and analysts to Friday’s report:

“The U.S. labor market posted another solid month of growth, reinforcing our core view that a tightening labor market is pushing the Fed towards increasing the pace of policy normalization this year. In our estimation, the labor market is tighter than the topline data implies and the central bank is running the risk of falling further behind the curve than it already is.” —Joe Brusuelas, RSM US

“It isn’t perfect—the retail sector continues to shed jobs at an alarming pace, and the overall number of jobs added isn’t much to write home about.” —Svenja Gudell, Zillow

“The unemployment rate fell for all the wrong reasons last month, with a 233,000 decline in the household measure of employment more than offset by a bigger 429,000 slump in the labour force. As a result, the participation rate dropped back to 62.7%, from 62.9%.” —Paul Ashworth, Capital Economics

“The weak job growth number isn’t a disaster because it still keeps up with population growth. But the decline in unemployment and participation plus poor wage growth presents the Fed with a bit of a conundrum. The labor market appears to be getting tighter and tighter, but wages just aren’t responding.” —Paul Diggle, Aberdeen Asset Management