Official unemployment rate data

This morning the Department of Labor released both its jobs added and unemployment rate numbers for the month of May.  In short, 431,000 jobs were created.  That brought the unemployment rate down to 9.7% from 9.9%.  Financial markets today are focused on the fact that 411,000 of the hires were for temporary census hires.  According to the government data the private sector created 41,000 jobs.  This compares with ADP’s data yesterday which said 55,000 private sector jobs were created.

Analysis: I may sound like a stubborn, broken record here, but I am unconcerned that the private sector only created either 41,000 or 55,000 jobs last month.  It has been my feeling all along that jobs would be very difficult to come by exiting the recession.  Not only that, but the unemployment rate will remain stubbornly high for a very long time.  But the real news in the data is that the U.S. private sector is creating jobs and consistently so.  Additionally, 411,000 temporary jobs is still a lot of money being put into people’s pockets that didn’t have money before.  It is still money being re-directed into the economy that was missing before.  It is still people who have expanded economic options and a greater ability to make choices.

The (so-far) big sell-off today indicates to me that there is a lot of speculative money in the stock market.  In previous years that speculative money was in the real-estate or commodities markets.  If it takes a few slightly weaker than expected numbers to shake these folks out of the stock market I will be pleased with that outcome.

Importance grade: 8; same as yesterday.

Jason