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June 4th, 2010

May’s Job Numbers Take a Step Back

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Despite the fact that jobs were added at their fastest pace in a decade, stocks were driven lower this morning and optimism of a firm and continued recovery faded due to the fact that the number of new jobs in May were overwhelmingly exaggerated by the hiring of temporary census workers.

Payrolls increased by 431,000 in May, yet according to the U.S. Labor Department, private-sector payrolls increased by only 41,000 (290,000 jobs were added in April). The unemployment rate did drop from 9.9% in April to 9.7% in May, a result of fewer job seekers in the market, according to Economy.com.

While the overall number of unemployed workers ticked downward last month, the average duration of unemployment set a new record.

From Economy.com:

The number of unemployed workers edged down in May, to 14.97 million as more workers left the labor market. The number of reentrants fell by 286,000 in May. The number of workers unemployed longer than six months edged higher to 6.76 million. A record 46% of unemployed workers have been out of work more than six months. Meanwhile, the number of newly unemployed workers (less than five weeks) increased to 2.75 million or 18.7% of all unemployed workers. The average duration of unemployment increased to 34.4 weeks, a record.

The title to last month’s job’s post (regarding April’s numbers) was “‘Labor Market Has Best Month in Three Years.’” While we have cautioned before about concerning yourself too much with the month-to-month changes — advising instead to focus on the overall trends — we can’t help but wonder if May was just a fluke, or if it negatively impact our job numbers moving forward?

A post from a Wall Street Journal blog offers some insight:

The U.S. economy in May added the most jobs in a decade — 431,000 — largely because of census hiring. But the boom appears to be over, and that could translate into ugly overall employment numbers in the coming months if private employment doesn’t pick up.

Improvement in the overall U.S. economy over the past year could provide a better foundation for private employment growth compared to the period after the two prior censuses. If it doesn’t, expect the monthly payroll report to show negative numbers — net losses across the overall economy — into the summer.

How does all this jobs talk influence/impact housing and mortgages? Find out by reading our post “This is How Jobs Impact Housing.”

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4 Responses to “May’s Job Numbers Take a Step Back”

  1. Tweets that mention May’s Job Numbers Take a Step Back | HSH Financial News Blog -- Topsy.com Says: June 4th, 2010 at 11:30 am

    [...] This post was mentioned on Twitter by Jamie Smith Hopkins, HSH Associates. HSH Associates said: May’s Job Numbers Take a Step Back http://bit.ly/d2lAoF Temporary hires steal the spotlight from the hopes of a firming recovery [...]

  2. Robert Van Gilder Says: June 5th, 2010 at 1:26 pm

    I don’t believe the “gains” that you mention are sure signs of a recovery. The Job market is floundering. The 431,000 NFP report yesterday was disappointing in that it was primarily made up of temporary Govt jobs. The moving average is still 400,000 + not a sign of recovery at all.

    The European crisis seems to be deepening. This should manifest into better “Paper” auctions. The avg BTC has been right around 3.00 for all issues. And the indirect bid has picked up as well. (This will also help keep mortgage rates low.)

    Housing continues to Flounder. Record numbers of foreclosures and “pre” foreclosures. (Gee, without a job, how do you pay your mortgage?)Values in the most populous states will continue to decline.

    Record number of States have billion dollar plus deficits.

    I don’t see a remedy, except time.

  3. Tim Manni Says: June 7th, 2010 at 8:13 am

    Robert,

    We agree, and that was one of the main points of the post: May’s gains are in no clear way a “sure sign of recovery.” Absent all the temp hiring, May’s numbers took a step back from April’s (hence the title).

    “I don’t see a remedy, except time.” Since no other remedy, stimulus money included, has worked, time may be all we have at this point.

    Great comment Robert, hope to hear from you soon, thanks,
    Tim

  4. maile Says: August 16th, 2010 at 12:43 am

    Great comment Robert, hope to hear from you soon, thanks

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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