Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Nonfarm Payrolls Increased 217,000 in May
Posted Under: Data Watch • Employment

 
Implications: Solid report on the direction of the labor market. Nonfarm payrolls increased 217,000 in May. That's the fourth straight month above 200,000, the first time that's happened since 1999-2000. The other leading piece of good news was the unemployment rate staying at 6.3% after the steep drop from 6.7% in March. Most economists had expected the jobless rate to tick back up. Moreover, the unemployment rate remained at 6.3% despite a 192,000 gain in the labor force. Civilian employment, an alternative measure of jobs that includes small business start-ups, increased 145,000. Unlike last month, most of the details in today's report were also good. Total hours worked and average hourly earnings were up 0.2% each, for a combined increase of 0.4% for May. This measure of total cash wages is up 4.2% in the past year, more than enough to fuel continued increases in consumer spending. Also, the median duration of unemployment fell to 14.6 weeks, the lowest in five years, and the share of voluntary job leavers among the unemployed increased to 8.9%, tying the highest level since 2008. In the past, Fed Chair Yellen has written that a higher share of leavers shows confidence in the labor market. The most negative news in today's report was that, despite the gain in the labor force, the participation rate stayed at 62.8%, still tied at the lowest level since the late 1970s. We think the long-term downward trend in labor force participation since 2000 is largely tied to the aging of the Baby Boom generation. However, we can't help but notice the impact on the labor market of the end of extended unemployment insurance at the start of the year. Extended benefits kept some people from working and also kept others, who really didn't intend to look for work, in the labor force (they had to claim they were looking to keep getting benefits). So the end of extended benefits should push down the jobless rate by both encouraging work among those who want to work and discouraging participation among those who really don't want to work. And, since the start of the year, we've had both faster payroll growth and a decline in the participation rate. As we always remind our readers, the labor market could and would be doing better with a better set of public policies. But it's still improving. In the past year nonfarm payrolls have grown at an average monthly rate of 198,000 while civilian employment is up 158,000 per month. We expect continued Plow Horse gains in the months ahead, pushing the jobless rate below 6% later this year. In turn, this will help put pressure on the Federal Reserve to move up short-term interest rates in the first half of 2015.

Click here for PDF version
Posted on Friday, June 6, 2014 @ 9:37 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.