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Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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June 03, 2005

Jumping The Gun On The Employment Report?

I suspect many agree with Kash's assessment that "May employment report released this morning by the BLS is quite disappointing."  Barry Ritholz certainly agreesMichael Mandel too.

General Glut as well. I think.  The good General does make this pretty important observation:

Putting the strong April together with the weak May, we get an average for 2005:II thus far at 176,000 jobs per month, just slightly above the level needed to simply keep pace with population growth. For the calendar year the US economy is averaging a nearly identical 180,000 jobs per month.

OK, he does go on to note that we appear stuck at a pace below that of early 2004, and the it's-all-construction warning makes it due appearance.  But that doesn't mitigate the fact that it is always dangerous to get too exercised about one month's report, and the trend appears to be holding pretty steady.

The bond market apparently saw fit to second-guess it's first reaction.  From CNNMoney:

After a morning rally fizzled out, Treasury prices dipped Friday afternoon on a service sector report and jitters by speculators...

Treasuries initially spiked up after the government reported Friday that May payrolls grew by only 78,000, well below the 175,000 consensus forecast of economists surveyed by Briefing.com.

The jobs number was the smallest monthly increase since August 2003, when only 2,000 jobs were added, according to revised figures from the Labor Department...

But by midday, bonds had given back all of those gains and were down from the previous session as traders sold their positions for profit ahead of the weekend.

A report by the Institute for Supply Management showed growth in the service sector for May, even though it fell short of Wall Street expectations. The index -- which considers everything from coffee shops to airlines, fell to 58.5 from 61.7 -- but remained above 50, which indicates a sign of growth.

Also adding to the slide were comments by Federal Reserve Governor Edward Gramlich, who said he was uncertain what stage of rate-hike campaign the central bank is in now.

His remarks, which hinted that the Fed would not alter from its measured pace of interest rate increases, came two days after Dallas Federal Reserve Bank President Richard Fisher said the tightening campaign was in the "eighth inning."

Here's the picture:


If you are looking for more mixed emotions,The Big Picture provides the Wall Street Journal's usual roundup of economists' opinions.

June 3, 2005 in Data Releases | Permalink


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» Disappointing job statistics? from Econbrowser
The May employment figures released by the Bureau of Labor Statistics yesterday sent mixed signals, revealing that U.S. job creation slowed in May even as the unemployment rate edged slightly lower. [Read More]

Tracked on Jun 5, 2005 12:38:42 AM


Nice recent gain on US dollar,
nice recent gain on bonds,
makes sense to sell into bond
rally induced by weak job numbers. No?

Posted by: Jeremy | June 04, 2005 at 01:01 PM

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