Jobs Report Surprises to the Upside — But Is the Labor Market Really Strong?

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Okay, Jobs Friday. We’re gonna make sense out of the jobs report. Kind of blew away. Blew away. I on the face. I mean, this looks pretty good. 172,000 jobs in May. That is a four sigma beat. unemployment did remain the same at 4.3%. it’s actually

highest we’ve had in some time, quite frankly. the number for March was revised upward by twenty-nine thousand. the number for April was revised up by sixty-four thousand. So you’ve got ninety-three thousand more over the past couple of months. That’s that’s a good sign.

I want to take a look though a little bit deeper into these numbers because unfortunately most outlets are not going to do that. We still have the labor force participation rate holding steady at 61.8%. hourly earnings up by 12 cents, which is basically in line. Now I I I’m looking at the jobs that were created here.

Who’s being hired? What’s going on? What sectors do we have? May, leisure and hospitality. Again, entering into summer, 70,000 jobs. That’s well above the average 14,000 gain over the prior 12 months. food services and drinking places added 48,000 jobs.

healthcare has always been a stalwart. That’s basically almost kind of like government jobs, the way healthcare is done in this country. 35,000 jobs, social assistance employment up 12,000. mining 5,000, financial activities declined by 22,000. transportation warehousing basically unchanged. The number that

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I’m gonna be honest, as I said, bothers me, is the employment in local government. Local governments adding fifty-five thousand jobs. Again, I don’t know what that’s about. I I really don’t. I’m trying to make heads or tails out of that, quite frankly. again, I government reports that I’ve been very clear about this for some time, I I take them not with a a grain of salt, but a whole sack.

Of salt. Very, very difficult to translate. we always talk about the revisions. In this case, we got some revisions to the upside, which is nice because we haven’t really seen much of that. But I I look at the ADP report, I look at the private sector report, I look at the NFIB survey, and that actually came out yesterday. And what it is, is a survey.

National Federation of Independent Businesses, Small Businesses. Now I’ve explained this before here in the country. this country, the real job creation, really have real job growth in this country. It comes from businesses that are five years old or less. Larger companies, hire, fire, bit of a wash.

It’s those smaller businesses out there, which is the real job engine, always has been for this country. And smaller companies out there are slashing their hiring plans. yeah, again, they’re scaling back plans. The all this entire survey scaling back plans for hiring in the future. A lot of this, you know, again, I I think that.

It’s banned for especially for small businesses. And we’ve talked about this in terms of tariffs. And we also talk about it in terms of energy costs right now, fuel costs at this point in time. It hits them harder. Tariffs hit small businesses harder. much more w you know, if you’re a small sneaker manufacturer or whatever it may be, and you have to, you know, source supplies or labor, whatever it may be, you you you don’t have the negotiating power that a Nike has. Let’s just leave it at that. And that’s

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What really hurt a lot of small businesses and held them back. something that we told you was going to happen. Now we’re also dealing with energy prices. Again, small businesses feeling it. they don’t have the wiggle room that large companies do. That’s a part of it. Another interesting thing as well is is that small businesses are mentioning it’s very, very difficult for them to keep up with salaries.

Because again, many people out there, these are these are more entry-level jobs, unwilling to work unless you’re paying a certain amount of money. And that’s that’s part of the issue that we have here with the the assistance that we give out here in this country. Many people are just making that calculation. Why should I work? Why should I work? I mean, the cost of living is so high. What’s what’s the big deal? I I will just live off of government assistance. And this is something that they’re also putting out there. This is a part.

of it. we shall see. I’m I’m happy. Happy that we are creating jobs. I think that this is fantastic. We’re gonna see how this filters through and what’s going to happen over the next several months. Initial reaction to this as far as the bond market was concerned is you saw yield spike thinking that hey the Fed’s gonna have to come in and raise rates, bear that no mind. Okay. Those are just short term

Trading nonsense. I’m not really buying into to much of that by any stretch of the imagination. We shall see. We shall see what’s going to happen moving forward. Hopefully we won’t continue to see a trend of government jobs and healthcare jobs. We want to have them more in manufacturing and other areas that have really, really been lagging. But you know, I’m gonna I’m gonna glass half full this one so far. Watchdog on Wall Street.com.