Employment report preview: Slower payrolls, unchanged unemployment rate

研报英文原文证据摘录

Employment report preview: Slower payrolls, unchanged unemployment rate

IdeaMIndustry particulars:

The World Cup probably had an effect on May. We expect the higher level of payrolls

extends into June, but we do not expect a repeat of the May growth pace: Leisure and

hospitality payrolls rose 70k in May, versus a six-month average of 10k per month. Much

of the pickup was in restaurants, 38k above the six-month pace, another 10k from hotels,

and another 7k from spectator sports.

In the opposite direction, finance payrolls were well below trend, with broad declines

putting them about 10k below trend. We expect some stabilization.

The broader path of services payrolls weakened from 169k in March and 163k in April to

92k in May. Our forecast for June is a similar 85k.

In goods payrolls, construction employment surged in May but we do not expect a repeat.

Public sector payrolls are a wild card. Non-education local government payrolls surged in

May. We think the strength reflects flaws in seasonal adjustment as the 12-month pace in

SA payrolls for this group is well above the NSA pace. Last year showed a similar

deviation that persisted for several months: the correction is not immediate. We expect

these payrolls about on trend in June, but a larger decline is possible.

Other indicators have on balance suggested some softening, with jobless claims rising and

ADP down a little from its peak.

Exhibit 3: Local government payrolls excluding education Exhibit 4: Jobless claims rising

appear to have been boosted by seasonal adjustment

New claims (4-week avg, 000s, left)

255 2000

Local government payrolls ex education, Continuing claims (4-week avg, 000s, right)

12-month ch., 000s

140 1920

130 Seasonally adjusted

120 1840 NSA

110 215

100 1760

80 1680

60 175 1600