Today, job growth lets us down again.
For the second straight month, job growth came in lower than expected. Disappointing for sure, but not the end of the world.
The 559,000 jobs added in May were less than the 671,000 expected, although it’s still not a bad number. The unemployment rate fell from 6.1% to 5.8%, which beat expectations.
How did the economists get it so wrong again? Aren’t you embarrassed to be an economist, Greg?
After April’s huge disappointment, economists had high hopes for job creation in May, especially after the ADP report released earlier this week had private payrolls rising by 978,000 last month.
Increasing vaccinations and business reopenings would surely increase demand for workers. Sure, companies were having a hard time finding workers, due in part to the enhanced unemployment benefits. But since the April report came out, 25 states have ended the federal unemployment benefits early. These states immediately saw a jump in job searches, which led many economists to expect the May number to be a big one. Seems like it will take more than a month for us to see the true impact ending these benefits will have on hiring.
So don’t be too hard on economists, who for once were being too optimistic. I feel a lot more let down by the Yankees right now than the labor market. They should feel embarrassed—not the economists.
Just keep the following in mind:
- May’s job growth was more than double April’s.
- Adding 559,000 jobs in a month is still pretty awesome.
- Jobless claims fell to another pandemic-era low last week.
- The latest estimate for second-quarter GDP growth is 10.3%.
- The Federal Reserve won’t feel as much pressure to raise rates, at least for now.
The economy is firing on all cylinders these days, even if hiring hasn’t joined the party yet.