[See First Impressions here.]
As noted, payrolls grew by 175,000 last month, and the jobless rate ticked up slightly, driven may more people joining the labor force. A few facts of the case:
–Revisions to the prior two months were slightly negative: payroll growth was revised up 4,000 in March and down 16,000 in April for a sum of -12,000 in those two months.
–The average pace of job growth over the past three months–155,000–is slower than that over the prior three months: 255,000. This could be evidence of the impact of increasing fiscal headwinds on job creation.
–Manufacturing has been on a bit of a slide (see figure) in the past few months. After rising consistently since early 2010, it has lost jobs for the past three months, down 21,000 since February. The growth of our trade deficit in recent months surely hasn’t helped here.
–In what looks like a sequester effect, the federal government has been shedding jobs at a sharp clip, down 45,000 in the past three months (see figure).
–Hourly earnings before inflation are up 2% over the past year, a subdued growth rate as we’d expect given consistently elevated unemployment. But since consumer inflation has been running at only about 1%, even this moderate pace of wage growth yields real gains.
–The percent of the long-term unemployed (jobless for at least six months) has been slowly coming down, and at 37.3% last month was the lowest its been since late 2009. That is, however, still a very highly elevated share for this variable.
–That stuff I was saying yesterday about forecasts of the payroll number being a crap shoot. Ignore it, as I almost nailed the number. I predicted 178K total, and 180K private–the actual numbers were 175K and 178K. So put me down as a social science genius at least until the revisions. And kudos to Jan Hatzius at GS who predicted 175,000. Jan, have a beer tonight on me (better yet, just tell the bartender you nailed the payroll number–I’m sure that will do it).