Our NFP projection track record certainly is not improving. With all the news about NSA/PRISM and basically the 'Big Brother' watching over everyone (http://www.washingtonpost.com/wp-srv/special/politics/prism-collection-documents/), who knows which numbers released by BLS are legitimate or accurate. But the market continues to move based on these figures, so we have to pay attention. May change in NFP was 175K, which included a net -12K adjustment in NFPs for March and April. For this reason, that 175K change should be looked at as 163K which is pretty much in-line with the consensus, and significantly higher than our 95K guesstimate.
The winners were jobs in retail trade and temp help services with net changes of +27.7K and 25.6K, respectively. Jobs in healthcare, and leisure and hospitality also grew. Weakness was evident in manufacturing, as jobs in that sector declined for the third consecutive month. Government jobs also declined, but the rate of decline has been decelarating the last couple of months.
With all of those good numbers, average weekly hours remained flat, and hourly earnings went up by only a penny. Wages continue to lack growth.
On the household survey, the number of people unemployed for more than 27 weeks increased in May, unlike in March and April. Decline in unemployment duration of 5 - 14 weeks and 15 - 26 weeks was more than offset by increase in the ones unemployed for less than 5 weeks.
The U-6 unemployment rate went down 10bps to 13.8%, matching the March level and below last year's 14.8%.
S&P 500 futures up 0.65%. Of course, such initial positive reaction is not a surprise. We must note that the talk of QE exit strategy will resurface which could put the QE premium that is everpresent in the equity market at risk. Lastly, watch what you do and say as the 'Big Brother' is watching you!
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