The second-consecutive disappointing monthly jobs report put a damper over markets Friday morning. But there are some positive signs.
One is that both March and April job figures were revised higher, by a total of 53,000 jobs. Had there been no revisions to past months, the report for May would have shown a gain of 168,000 jobs, a bit better than the consensus forecast. Instead, the reported rise is 115,000, which is the lowest gain since October.
The revisions have been consistently positive in recent months, and that in itself is a sign of relative economic strength. (The source of the revisions is late responses by companies to the Labor Department survey. The department at first estimates numbers for the missing companies, and it appears those early estimates have been too low.)
Still, this does start to raise fears of another spring and summer slowdown, as happened in 2010 and 2011. At some point, you have to wonder if what is going on here is less economic volatility and more bad seasonal adjustments. With fewer people being hired or fired than in normal economic times, the adjustments may make some months look better than they are, and others worse.
The household survey, which is the source of the unemployment figures, shows a large decline in the work force, and a decline in the number of people with jobs. That could indicate a lot more discouraged workers. Or it could be a reflection of the much greater volatility in that survey. It had been looking better than the establishment survey, and even with this report the household survey says there were 2.2 million more people with jobs in April than in the same month of 2011, while the establishment survey says there are 1.8 million more jobs.
Within the household survey, the number of people out of work because they lost their last job — as opposed to people who quit or who have entered the labor force — continues to decline. So does the number of long-term unemployed workers.
Over all, this report indicates the job market is getting better, but at a slower rate than had appeared to be the case a few months ago.
