{"id":1542,"date":"2019-06-05T12:11:57","date_gmt":"2019-06-05T16:11:57","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1542"},"modified":"2019-06-05T12:11:57","modified_gmt":"2019-06-05T16:11:57","slug":"may-private-sector-jobs-non-manufacturing-activity-and-help-wanted-online","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1542","title":{"rendered":"May Private Sector Jobs, Non-Manufacturing Activity and Help Wanted OnLine"},"content":{"rendered":"\n

KEY DATA:<\/strong> ADP: 27,000; Construction:\n-36,000; Small Businesses: -52,000\/ ISM (Non-Man.): +1.4 points: Orders: +0.5\npoint\/ HWOL: -2.3%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cApril\u2019s employment surge may have been an\naberration as May is looking a lot softer.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  When the April jobs report showed that 263,000\nnew positions were created, I warned that this might be just one of those\ntemporary blips that we get in the data and that May\u2019s number could be a lot\nweaker.  Well, we will know for sure on\nFriday, but the ADP estimate of private sector job gains seems to point to that\nbeing the case.  Businesses added few new workers\nin May and the details were pretty gruesome. \nSmall business payrolls shrank dramatically.<\/em><\/strong>  It\u2019s not just that smaller companies cannot\ncompete on wages in a tight labor market but the changing structure of retail\ndemand is putting a lot of them out of business.  That said, there was only a minimal gain in\nmid-sized company payrolls, so not a lot of firms are finding it easy to\nhire.  There was also a huge drop in\nconstruction workers, but that came after a strong gain in April.  <\/em><\/strong><\/p>\n\n\n\n

Supporting the possibility of a disappointing May\njobs report was a solid decline in the Conference Board\u2019s Help Wanted Online\nIndex.<\/em><\/strong>  Every region and almost every state posted\nlower online ads for workers.  Similarly,\nreductions\nwere seen in almost every occupation category, so you can say this was an\neconomy-wide issue.  <\/em><\/strong><\/p>\n\n\n\n

While the job market seemed to falter in May, the\nnonmanufacturing portion of the economy continued to do okay.  The Institute for Supply Management reported\nits index rose as new order growth accelerated.<\/em><\/strong> Business activity in the\nservice and construction segments of the economy improved quite solidly.  Unlike the other surveys released today, the\nISM employment index rose.<\/em><\/strong>  The\nin the non-manufacturing segment, however, stands in contrast to the May\nmanufacturing report, which declined, led by a sharp shrinkage in order\nbooks.  That does not bode well for\nfuture production.<\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong> All eyes are on trade discussions, but the\ntariffs and threats of additional tariffs may already be starting to have an\nimpact on growth.<\/em><\/strong>  I don\u2019t expect\nthe jobs report to come in at double digits, but a low triple-digit May jobs number\nis a real possibility.<\/em><\/strong>  That\nwould bring the average for the three months close to expectations and show\nthat the April number was foolish.  But\ngiven the equity markets\u2019 sensitivity to any weak number, it could create an\noutsized impact.  Investors are counting on the Fed\nto bail out the economy but they are fooling themselves.  The Fed has limited ammunition to fight a\nslowdown.  Let\u2019s face it, if the Fed has\nto go below one percent again, it will be in trouble.  <\/em><\/strong>The only reason to go that low is if\nthe economy is in deep trouble and not a lot of businesses will be making major\ncapital spending decisions or households buying big-ticket items under those\ncircumstances.  <\/em><\/strong>Interest rate cuts\nwould have limited impacts.  The\nFed has a little more than one percentage point of rate cuts before it\neffectively runs out of ammunition. It would need a lot more than that to turn\naround a faltering economy.  And with the\nU.S. budget deficit nearing one trillion dollars, fiscal policy is in a\nstraight jacket.<\/em><\/strong>  So we\nbetter hope that a major slowdown doesn\u2019t occur anytime soon or to quote George\nH.W. Bush, we will be in \u201cdeep doodoo\u201d.      <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ADP: 27,000; Construction: -36,000; Small Businesses: -52,000\/ ISM (Non-Man.): +1.4 points: Orders: +0.5 point\/ HWOL: -2.3% IN A NUTSHELL:  \u201cApril\u2019s employment surge may have been an aberration as May is looking a lot softer.\u201d WHAT IT MEANS:  When the April jobs report showed that 263,000 new positions were created, I warned that this … Continue reading May Private Sector Jobs, Non-Manufacturing Activity and Help Wanted OnLine<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1542","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1542"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1542\/revisions"}],"predecessor-version":[{"id":1543,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1542\/revisions\/1543"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}