Bank of the West: Some Quick Thoughts on the U.S. Payroll Report

  • News
  • by BPC Staff
  • on June 5, 2015

Scott Anderson, Chief Economist at Bank of the West, offers some quick thoughts on the U.S. Payroll Report:

Job growth roared back to life in May.  +280K net non-farm jobs were created, outdistancing all expectations, and bringing the average monthly job growth over the last 3 months to +207K.  Private service providing industries drove the job gains.

Solid upward revisions for March and April jobs as well- a net +32K jobs

Wage growth accelerated; average hourly earnings +0.3% and 2.3% yoy.

Don’t sweat the unemployment rate rise to 5.5% from a revised 5.4% for April.  The increase was driven by a healthy increase in the labor force participation rate to 62.9% as discouraged workers re-entered the labor force.

Bottom-line: The May payroll report supports the transitory slowdown story in the U.S. and points to a better second half performance.  Not enough for the FOMC to pull the trigger in June in my opinion, though September is still in their sights.  S&P 500 futures are trading down, and the 10-Year Treasury yield is up 10 basis points to 2.4 percent.

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