3 Charts to Prepare for Friday’s Jobs Report

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn
Source: Bytemarks / Flickr

Source: Bytemarks / Flickr

Hiring typically increases in the spring and the summer months.

In April, the headline numbers from the Department of Labor’s Employment Situation Report were staggering, beating economists’ expectations handily. That month, the United States economy created 288,000 jobs, pushing the unemployment rate down 0.4 percentage points to 6.3 percent, the lowest in more than five years. The last time U.S. employers added more jobs was in January 2012. And that weighty jobs growth was largely the result of the labor market catching up from the winter slowdown. But with the end of weather-related distortions, the labor market is expected to have stabilized and job creation to have slowed in May. Economists predicted that employers added a more modest 218,00 jobs to payrolls last month. Payroll numbers tabulated by ADP in conjunction with Moody’s Analytics reflected a similar slowdown; April’s 215,000 payroll additions were followed by May’s weaker 179,000.

Stabilization, in the most general sense, tends to be seen as a positive. But it can be hard to see the positives when the are accompanied by a slowdown in hiring and an increase in the unemployment rate. In addition to weaker job creation, economists also expected the jobless rate to jump from April’s 6.3 percent to 6.4 percent. But that is actually an encouraging sign for the labor market. April’s Employment Situation Report revealed that the unemployment rate had fallen from 6.7 percent to 6.3 percent. However, that 0.4 percentage point drop in the unemployment rate came from a sizable decrease in the labor force, meaning workers were still discouraged and unable to find employment. And that aspect of the jobs report was by no means surprising; a disheartened labor force and a record low labor force participation rate has characterized the recovery and is evidence that recovery has not yet reached all Americans. By comparison, the expected 0.1 percent increase means more people are entering the labor force in search of work, and that is an indication that job hunters are becoming more confident in the health the labor market.

Ahead of Friday’s Labor Department jobs report, three additional sources of data can provide further insight on how the labor market’s recovery progressed last month.

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business