Negative May Jobs And Employment Data
On Friday the Labor Department released economic figures that discouraged the stock market as the S&P 500 and DJIA were both down 1% at opening bell, sending stocks further south after a dismal week on Wall Street. U. S. employers added 54,000 nonfarm payroll jobs to the economy after 232,000 jobs were added in April. The unemployment rate for May showed an increase from April to 9.1%. The ISM services index rose from 52.8 in April to 54.6 in May. The positive ISM services figure gave somewhat of a counter-balance to the negative jobs growth and unemployment data as the major indices began to pair its day’s losses in the second half of the trading day.
May’s nonfarm payrolls data puts a halt to several months of U.S. job growth as May saw the fewest amount of jobs added to the economy in 8 months. The economy has been believed by many to be going through a recovery with a 2011 overall increase in private sector jobs and a decline to single-digit unemployment since 2009. Friday’s Labor Department releases show possible headwinds for the recent months’ economic recovery as Treasuries and commodities futures have responded to such negative data. Economists have stated that it would take a monthly addition of 125,000 new jobs to the economy in order to keep pace with the rising U.S. population. The rise in unemployment comes at a time when the Obama administration is confronted with a budget deficit and increasing political pressure to reduce government spending.
– Shaun Hoyes
Article submitted by: Shaun Hoyes of the Capital Markets Lab (CML). To learn more about the Capital Markets Lab please visit https://business.fiu.edu/capital-markets-lab/.