The May non-farm payrolls report was +69k (mkt + 150k), defying the balance of the partial indicators, which had suggested a number ~200k. The US establishment survey is considered to be well measured – once the near term revisions come in. The revision to March lowered the estimate by 11k (154k v. 143k) and the revisions to April lowered the estimate 38k to 77k.
Along with the headline rate, the BLS reports that the average work-week declined by 0.1hr MoM, while the manu workweek (typically the most cyclical) fell 0.3hrs to 40.5hrs (still healthy). Average hourly earnings for all employees on private nonfarm payrolls edged up by 2 cents to $23.41. Over the past 12 months, average hourly earnings have increased by 1.7 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees edged down by 1 cent to $19.70.
Notwithstanding the higher unemployment rate (+10bps to 8.2%) the household survey suggests 422k new jobs (though a 642k increase in the labour force). Job losers increased 137k to 6989k, and job leavers were -106k to 891k.
Among the leaders, construction was -28k and temporary help was +2.5k.
Over-all, this is a weak report. I expect that the Fed will take out some insurance at their 20 June meeting – likely to be an extension of twist, or some MBS buying.