Goldman Slashes Rate Hike Odds After "Awesomely Bad" Jobs Report
Firts, a few notes from FTN on today's report which the firm classified quite simply as "awesomely bad":
U.S. Jobs ’Awesomely Bad’, Particularly Poor Timing
You are here
Labor
312K Full-Time Jobs Were Lost In Last Two Months, Offset By 118K Part-Time Hires
While we already assessed the quantitative aspect of today's jobs report, which we characterized as abysmal because even when factoring in the 35,000 Verizon job losses, there was some 130,000 unexplained layoffs (sorry, it wasn't the weather), it is time for a look at the qualitative aspects of the report. And, we are sad to report, that things here go from bad to worse: while in the recent past disappointing headline payrolls were at least offset by an improvement in full-time jobs, this did not happen in May.
Americans Not In The Labor Force Soar To Record 94.7 Million, Surge By 664,000 In One Month
So much for that much anticipated rebound in the participation rate. After it had managed to rise for 5 months in a row through March, hitting the highest level in one year, the disenchantment with working has returned, and the labor force participation rate promptly slumped in both April and May, sliding 0.4% in the past two months to 62.60%, just shy of its 35 year low of 62.4% hit last October. This can be seen in the surge of Americans who are no longer in the labor force, who spiked by 664,000 in May, hitting an all time high of 94.7 million.
Payrolls Huge Miss: Only 38,000 Jobs Added In May; Worst Since September 2010
If anyone was "worried" about the Verizon strike taking away 35,000 jobs from the pro forma whisper number of 200,000 with consensus expecting 160,000 jobs, or worried about a rate hike by the Fed any time soon, you can sweep all worries away: moments ago the BLS reported that in May a paltry 38,000 jobs were added, a plunge from last month's downward revised 123K (was 160K). The number was the lowest since September 2010!
Your Last Minute Payrolls Preview: What Wall Street Expects
In less than an hour, the BLS will report the latest, May, non-farm payrolls and unemployment data. Here is what consensus expects:
- US Change in Nonfarm Payrolls (May) M/M Exp. 160K (Low 90K, High 215K, Prey. 160K, March. 208K)
- US Unemployment Rate (May) M/M Exp. 4.9% (Low 4.9%, High 5.1%, Prey. 5.0%, March. 5.0%)
- US Average Hourly Earnings (May) M/M Exp. 0.2% (Low 0.1%, High 0.4%, Prey. 0.3%, March. 0.2%)
The NFP breakdown by bank is as follows: