May non-farm jobs were up just 54K, non-farm private jobs +83K;the unemployment rate increased to 9.1% frm 9.0% in April. April and March non-farm jobs were revised down by an additional 39K. Manufacturing down 5K, government jobs -29K mostly at the state level. The U-6 jobless rate 15.8%; those underemployed and those that have stopped looking. Jobless duration 27 weeks or more 6.2 mil up frm 5.839 mil in April. Going into the report the estimates were +150K non-farm jobs, +175K private jobs, 8.9% unemployment rate; estimates were all over the place but those were the general consensus.
The bullish view is that the slowing in the economy is temporary;weather, high gas prices and climbing food prices are pulling the economy lower. There is however a hard core group of forecasters, mostly those whose business requires investments in equities, that will continue their bullish outlook on the belief all those factors will go away soon. The word "temporary" is being tossed around loosely, yes the economic decline is temporary but we need some definition of the word in terms of specifics. The more realistic view, at least in our opinion is that consumers have a long way to go ion repairing their balance sheets and re-adjusting to the "new normal" economy that appears to be ignored by Wall Street. As long as house prices continue to fall and people increasingly lose faith in our political leaders businesses will not increase hiring, unemployment will remain high and the economy will stagnate with only minor growth.