Employers in the U.S. hired fewer workers in May than forecast, showing a lack of confidence in the recovery that may lead to slower economic growth.
Payrolls rose by 431,000 last month after a 290,000 increase in April, figures from the Labor Department in Washington showed today. The gain was smaller than the 536,000 median forecast in a Bloomberg News survey and reflected a 411,000 jump in government hiring of temporary help for the 2010 census. Private payrolls rose a less-than-forecast 41,000. The unemployment rate fell to 9.7 percent as Americans dropped out of the labor force.
Doing the quick math, this means that only 20,000 jobs were gained in the private sector. Meanwhile, the census jobs are temporary and so most of those jobs will be over by the end of July.
The unemployment rate fell to 9.7% and the pool of workers actually shrank by 286,000 people. That means that people again have stopped looking and gone back to being considered "discouraged workers".
Not surprisingly, equities are getting crushed in the pre market. The Dow may again test 10000 today. On the bright side, mortgage rates will again test all time lows. We're below 5% on the 30 year fixed and it's now pushing 4.75%. The ten year U.S. treasury is at 3.27%. That's at the very low end of the range. Watch to see if that breaks through a floor and heads toward 3%.
Some have said that the recession ended in July of last year. So, we're ten months into a recovery and jobs are nowhere to be found. This unemployment rate will continue to hover around 10% for the indefinite future. There is no spinning this. The economy continues to be stalled.