2011 Economic Calendar
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Employment Situation  
Released On 6/3/2011 8:30:00 AM For May, 2011
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm Payrolls - M/M change244,000 232,000 170,000 90,000  to 200,000 54,000 
Unemployment Rate - Level9.0 %8.9 %8.7 % to 9.0 %9.1 %
Private Payrolls - M/M change268,000 251,000 180,000 115,000  to 225,000 83,000 
Average Hourly Earnings - M/M change0.1 %0.2 %0.1 % to 0.2 %0.3 %
Av Workweek - All Employees34.3 hrs34.4 hrs34.3 hrs34.2 hrs to 34.3 hrs34.4 hrs
Nonfarm Payroll - level131.028 millions

Analysts had lowered their forecasts after an anemic ADP private payrolls report but they did not lower them enough as growth was very soft. Nonfarm payroll employment in May grew a modest 54,000, following a revised 232,000 jump in April and a 194,000 increase in March. The May figure came in lower than analysts' revised forecast for a 170,000 expansion. Also, the March and April revisions were down net 39,000. Private nonfarm payrolls advanced 83,000 in May, following a 251,000 increase in April. The median forecast was for a 180,000 increase in May.

Sluggishness in payroll jobs was broad based. Goods-producing jobs were basically flat while private service-providing rose moderately and government jobs declined moderately.

Goods-producing jobs edged up 3,000, following a 38,000 rise in April. Manufacturing jobs dipped 5,000 after a 24,000 advance the month before. However, construction nudged up 2,000 after a 5,000 increase in April. Mining gained 7,000, following an 11,000 boost in April.

Private service-providing jobs slowed to an increase of 80,000 after a 213,000 jump the prior month. There was not much to write home about as the biggest component gain was for professional & business services with a 44,000 increase in May. Health care rose 17,400 for the latest month. On the down side, retail trade fell 8,500 while leisure & hospitality dipped 6,000.

Government jobs contracted 29,000, following a 19,000 dip in April. This latest decrease was largely local government, led down by local government education.

On a positive note, wage growth improved in May as average hourly earnings rose 0.3 percent, following a 0.1 percent uptick in April. May's number topped the median forecast for a 0.2 percent increase. The average workweek for all workers in May held steady at 34.4 hours.

On a year-ago basis, overall payroll jobs in May eased to 0.7 percent, down from a 1.0 percent pace the month before.

Turning to the household survey, the unemployment rate nudged up to 9.1 percent from 9.0 percent in April. Household employment actually rose 105,000 for the month but was outpaced by a 272,000 gain in the labor force.

The big question is whether the May numbers are a temporary soft spot or a new trend. The Labor Department indicated that severe weather did not play a notable role in the data. While the recovery/expansion has gained traction, the trajectory is somewhat lower than earlier believed.

On the news, equity futures dropped sharply.

Consensus Outlook
IMPORTANT NOTE: The consensus numbers have been updated Thursday afternoon, following the ADP report and jobless claims report. Nonfarm payroll employment in April expanded a healthy 244,000, following a revised 221,000 advance in March and a 235,000 rise in February. Private nonfarm payrolls were even stronger, growing 268,000 in April, following a 231,000 rise in March. Government jobs fell 24,000, following a 10,000 dip in February. Wages were sluggish in April as average hourly earnings rose 0.1 percent, following a 0.2 percent gain in March. The average workweek for all workers posted at 34.3 hours, the same as in March.

From the household survey, the unemployment rate rose to 9.0 percent from 8.8 percent in March. Looking ahead, the headline payroll number will be important but a side show may be debate over how much McDonald's new "national hiring day" affected recent numbers. Was there a notable impact and was it more in May or in April since hiring appears to have been during and after the April payroll survey period?

The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.

Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.

The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.  Why Investors Care
During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month.
Data Source: Haver Analytics
The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy.
Data Source: Haver Analytics

2011 Release Schedule
Released On: 1/72/43/44/15/66/37/88/59/210/711/412/2
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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