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SMF:Employment Report Preview
In order to fully understand this month's labor report, we need to break it into three distinct sectors: private employment, census-related employment, and other government workers. Census workers are going to be the largest piece of labor growth, but may be underestimated by the consensus. The consensus expected Census Bureau workers to contribute 100,000 jobs in both March and April, but only a combined 114,000 workers were added to census payrolls. In May, the consensus expects the Census Bureau to add 300,000 jobs. However, back in January there were mumblings that it was going to add 500,000 total jobs by May. If this proves correct, then we may see an increase of nearly 400,000 jobs from the Census Bureau alone. The rest of the government sectors are expected to show moderate losses due to poor municipal/state fiscal health, but most estimates have the drop at less than 30,000. The private sector is a little more difficult to analyze. The initial and continuing claims levels for the entire month of May have been abysmal and would suggest a decline in payrolls. Yet, we saw a significant disconnect between the jobless claims numbers and the payrolls in April that would suggest hiring is occurring at faster rates than firings. Normally, this relationship is only sustainable when initial jobless claims are, at the minimum, in the low 400,000s. So, while we expect a jump in private payrolls by 225,000, there is the potential for it to be less.
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