Labor

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!

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:

ISM New York's purchasing managers survey collapsed in May from 57.00 to 37.2 - the lowest since April 2009. The bloodbath is the biggest monthly drop since May 2007. While 'hope' rose rather stunningly from 56.0 to 68.0 - the highest in years, current employment and 'quantity of purchases' both plunged to cycle lows.

So much for that April bounce!

Note we have adjusted the chart by centring ISM NY 50 print at 0 which separates expansion from contraction.

Transitory?

Initial jobless claims printed 267k - slightly better than expected and very slightly less than last week - which is oddd because both ISM Manufacturing and ISM Service employment data suggests a very different picture indeed.

Everyone knows the manufacturing industry is losing...

But don't worry, the Services economy is doing great and generating jobs...

Oh wait!!

Printing a perfectly as-expected 173k rise in jobs for May, ADP Employment change offers hope for tomorrow's payrolls to give The Fed the go-ahead for a rate-hike. This is still the second lowest print since last September as manufacturing (and goods-producing) jobs fell once again.

A little hope for tomorrow...

But note that today's ADP report does not include the Verizon strike data which means that the 173k ADP print is likely higher than what tomorrow's payrolls print will be (by around 25-35k)