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Some early U.S. data suggest May jobs report could echo April weakness

Kitco News

Some initial U.S. jobs data for May are showing signs of weakness, raising the possibility that April's disappointing employment report was not just a one-time blip.

The closely watched May jobs report will be based on surveys that will ask businesses about levels of payroll employment as of this week.

Hiring has recently stalled at a group of small businesses, according to high frequency data collected through May 9 by Homebase, which has been tracking employee time during the pandemic at a sample of around 54,000 restaurants, independent retailers and other small businesses.

Measures of shift work at around 35,000 firms both large and small that are tracked by time management firm UKG foreshadowed the weak April jobs report.

UKG data into May have shown work in the manufacturing, retail and health sectors all down.

"People have spent the last 14 months rebuilding their lives around the pandemic. They’ve made alternative childcare and schooling arrangements, budgeted for reduced household income, and adjusted their lifestyle. While there seem to be 'help wanted' signs everywhere you look, it could be as late as September before we see hiring numbers truly surge."

U.S. job growth unexpectedly slowed in April, likely restrained by shortages of workers and raw materials, to just 266,000 jobs, far short of the nearly one million expected. read more

The economy is still more than 8 million jobs short of where it was before the pandemic, and if such halting progress continues it will be years before the labor market recovers.

Economists generally are still expecting strong job growth in the months to come, as people return to more normal activities - a prospect given a boost this week when U.S. health officials said those vaccinated against the coronavirus could stop wearing masks in most circumstances.

Oxford Economics Chief U.S. Economist Gregory Daco said that at this point he expected 500,000 to 750,000 new jobs to be added in May, and "it may pick up."

Other preliminary indicators about the strength of hiring and the economy overall are mixed.

Jobless claims for the week ending May 8 fell slightly, but have been making only slow progress in recent weeks.

Consumer sentiment in early May tumbled as people worried about rising prices. Inflation expectations for the year ahead and over the next five years rose to their highest in more than a decade.

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