Huge Miss: Only 138K Jobs Added In May; April Revised Much Lower As Wages Disappoint

Tyler Durden's picture

As previewed last night, the jobs "whisper" risk was to the downside, and in what was a very disappointing print released moments ago by the BLS, the whisper was spot on with only 138K jobs added in May, far below the 185K estimate, and below the lowest estimate of 140K. This was the second lowest print going back all the way to last October. Additionally, April's big beat of 211K was revised substantially lower to only 174K, suggesting that any expectation the Fed may have had of "evidence" the recent economic slowdown was transitory was just crushed.

The change in total payrolls for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. This means that over the past 3 months, job gains have averaged 121,000 per month, a far cry from the 181,000 average jobs added over the past 12 months.

To be sure, as SouthBay Research points out, a big reason for the unexpected miss was the sharp seasonal adjustment favtor, which was the biggest going back to the financial crisis days:

Not helping the Trump agenda, manufacturing jobs declined sharply, posting the weakest growth of 2017.

Looking at the Household survey revealed an even uglier picture as the number of employed workers declined by 233K to 152,923, the lowest since March.

Even worse for wage watchers, while the average hourly earnings rose by 0.2% monthly, the annual increase also missed printing at 0.2%, with April revised from 0.3% to 0.2%, while the annual increase was 2.5%, also missing the expectations of a 2.5% print. This was the lowest annual increase in average hourly earnings since March 2016.

On an absolute basis, the rebound in average hourly earnings has now fizzled completely.

While there was a silver lining in the unemployment rate which declined again to 4.3% from 4.4%, a bigger problem emerged in the participation rate which took a big step lower from 62.9% to 62.7%.

More details from the report:

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months. In May, job gains occurred in health care and mining. 

 

Employment in health care rose by 24,000 in May. Hospitals added 7,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+13,000). Job growth in health care has averaged 22,000 per month thus far in 2017, compared with an average monthly gain of 32,000 in 2016.

 

Mining added 7,000 jobs in May. Employment in mining has risen by 47,000 since reaching a recent low point in October 2016, with most of the gain in support activities for mining.

 

In May, employment in professional and business services continued to trend up (+38,000). The industry has added an average of 46,000 jobs per month thus far this year, in line with the average monthly job gain in 2016. 

 

Employment in food services and drinking places also continued to trend up in May (+30,000) and has grown by 267,000 over the past 12 months. 

 

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.  

 

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in May. In manufacturing, the workweek also was unchanged at 40.7 hours, while overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours. 

 

In May, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.22. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.00. 

 

The change in total nonfarm payroll employment for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 121,000 per month. 

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Shocker's picture

Even though the numbers suck at least lately we been heading in the right direction.

Companies bring Jobs back to US – http://www.dailyjobfix.com

FrozenGoodz's picture

Jobs number missed ... it's actually in the title ... wake up 

 

500,000 jobs in renewable energy ... 50,000 Coal jobs 

 

johngaltfla's picture

Per Yellenomics it means it is time to raise rates.

She hates Trump anyways, so fucking up the economy is her revenge.

tmosley's picture

Luckily, their idea of "fucking up" the economy is to normalize rates, which is the only thing that can heal the economy.

We need rates to rise to 15% at the VERY LEAST. Consequences to the debt be damned. We need to start saving again, and 1.5% interest ain't gonna cut it. Even 15% is probably too low by half.

I_rikey_lice's picture

I would love 15% or higher. 

johngaltfla's picture

Rate normalization is impossible with a $4 trillion balance sheet, $20 trillion national debt + $100 trillion in unfunded liabilities.

It's inflate or die and the sniff of deflation is already in the air. Rents in SW Florida of all places are starting to creep lower and nationally demand dynamics are going to impact raw material and finished product pricing power by the end of Q3.

In other words, the Fed is going to fuck up again.

As usual.

papa song's picture

Not to mention variable rates on consumer credit cards and homes pegged to prime.

BullyBearish's picture

i laugh when people say, "the fed is going to f*Uk up" when they threaten to normalize...we got into this $hitty situation because the fed has already f*^ked up

 

what comes next is what SHOULD have happened in 2008...

 

 

johngaltfla's picture

2008 is optimistic. It's more like 1929 or 1836.

man from glad's picture

I submit we've already been a through a 1929 event. It is only masked by .Gov welfare, and endless printing of money. During the Great Depression the country had about 20% unemployment. And today about 20% of the population is taking .Gov assistance or program of some kind with 94 million not working. The difference is back then the dollar was backed by gold and the country had little debt. So I think what comes next is going to be very bad indeed and something we have never seen before.

 

 

Nobody For President's picture

I loved the 'as usual' John.

And 15% - fuck, a mammouth increase to 2% next month would bring a stock 'market' correction (ahem) that would bring tears to many, many eyes and smiles to the 'jump you fuckers' crowd.

Do it Janet!

johngaltfla's picture

It will be the September meeting cracking the 1.5% Fed Funds rate which will start the shit. Mark my words.

That and the GOP acting like the screaming little pussies that they are not getting anything passed.

FreeNewEnergy's picture

Seriously? You must be a banker. 15% interest on federal funds rate woud completely destroy the economy. There wouldn't be any money to save.

Please seek professional help, preferably from an Austrian economist.

yogibear's picture

Means much more central bank asset purchases. Print 100s of trillions more to buy everything so a few can be richer. Reaping the past only bigger! More and more debt. Time to double the debt again to $40 trillion in 8 years. Then double it again to $80 trillion.

Dutch1206's picture

Wait....so we should wait another 4 years to get back to decent interest rate levels to avoid the perception that Yellen is trying to fuck Trump over?  For fuck sakes, savers have been penalized for 8 years already.  

johngaltfla's picture

LOL, nope. Yellen is a moron. Read the book "Fed Up" to find out more. She's a total Keynsian idiot, in fact in 2007-08 until the big crash she viewed the Indymac collapse as an isolated incident and banks were "healthy" in her district at that time (California).

So don't worry, she'll fuck it up again just like every other Fed has.

As usual.

Pandelis's picture

this is a data driven Fed

johngaltfla's picture

This is a "bad" data driven Fed.

Fixed it for ya.

deoldefarte's picture

So, only 138,000 "new" jobs added, as per BLS.

As, about 150,000 workers in USA  retire each month. and since only 138,000 of these workers

were REPLACED, then IMHO, we LOST, 12000 jobs in may.

LoneStarHog's picture

Birth/Death Model ADDED:  TWO HUNDRED AND THIRTY THOUSAND - WTF?????

101 years and counting's picture

has birth/death model ever subtracted jobs?  its a complete crapshoot.  every month.  there is nothing that justifies these numbers since they are seasonally smoothed and fudged with this and other various "models".

LoneStarHog's picture

Yes, it subtracted jobs last September, December, and January.

Hal n back's picture

january and july are revision months. but since there is no detail available , intentionally, there is no way to be critical and document BD model

 

Mementoil's picture

This means perhaps no rate hike.
Dollar is gonna collapse.
Gold is gonna skyrocket!

Mementoil's picture

Yep.
Nothing has made me more Bullish on gold than the recent malaise among the gold bug community.
I find it to be the best contrarian indicator.
Technically speaking, gold is just a good 20-30 dollar pop away from cracking its old down trend line, extending all the way from 2011.
I was waiting for a watershed event that will generate such a pop, and this might be it.

tmosley's picture

>No rate hike is a watershed event

Delusion. You're in good company. Everything is delusion across the entirety of the markets.

Mementoil's picture

Look, we are all living under the paradygm of "economy is A OK, QE was a huge success, the Fed has saved the economy and is now in the process of normalizing rates and unwinding its balance sheet".
Anything which undermines this narrative has the potential to derail the whole economy.

So yes, no rate hike and a possible return to QE later on this year may be watershed events.

LawsofPhysics's picture

Raise those rates Mr. Yellen!!!!!

Squid Viscous's picture

perfect excuse for no rate hike, this shit is getting so obvious...

jamesmmu's picture

Sooo what! DOW doesnt give a shit about job report. 

Ricki13th's picture

Stocks are in a yuuuge bubble. Especially the NASDAQ. I woud watchthe bond markets which is getting flatter buy the minute. If that suck inverts run for the hills.

Jtrillian's picture

BUY BUY BUY - PPT

TheNuclearGenie's picture

Well, jobs were still added so the economy is growing. Who cares if its 100k or 200k? either way the market will go up and I will get richer.

101 years and counting's picture

9+ years of mediocre growth, actually no growth when you factor in money printing (inflation), this is still a transitory depression.

LawsofPhysics's picture

And it will be until there is serious deflation in the human population. Sorry, that's just how the laws of math and physics work. The size of the pie (earth's resources) hasn't gotten any larger...

tmosley's picture

I came here to laugh at you.

LawsofPhysics's picture

Don't worry schmuck, I am sure it will make eCONomic sense to mine those asteroids soon...

Talk about a joke!

How's that silver hoard? LMFAO!!!!

Seasmoke's picture

Looks like Mr. Yellen will have to explain to us why they will raise rates in July and not June.

spastic_colon's picture

its a hard data report so no big deal; markets only care about soft data hope numbers...........uber and lyft must not be hiring....plus the "markets" were preordained to go up today.

Yoann's picture
Also : March job gain trimmed to 50,000 from 79,000
Seasmoke's picture

So 138,000 - 37,000 - 29,000 = 72,000. And if they adjust May in June to -71,999 = +1 job. But by then no one will remember or care.

Stan522's picture

Of course Trump will get them blame for this despite the obstruction from the dem's in Congress and the preoccupation of the Russia narrative.........

Yen Cross's picture

  The labor participation rate dropped and so did the unemployment from 4.4 to 4.3. I'm such the MSM will have fun with that BS.

BigFatUglyBubble's picture

Spray Some Ivanka Trump (TM) Brand perfume on that turd

Uranium Mountain's picture

Janet is off the hook for a rate hike but on the hook for a failed monetary policy along with Obama.