Big Job Gains Not Enough To Stem Worries

Despite the fact that today’s employment report saw the largest one-month payroll gain in a decade, the news was somewhat disheartening, since the overwhelming majority of the gain was the result of the temporary hiring of Census takers. Meanwhile, the private sector, which added 158,000 jobs in March and 218,000 in April, saw payrolls grow by just 41,000 last month.

There were some positive trends in today’s report. The number of people working part time for economic reasons fell by nearly 350,000. Average weekly hours rose to its highest level since January 2009 and the alternative measure of unemployment, which takes into account those marginally attached to the labor force and involuntary part-timers, fell to 16.6 percent from 17.1 percent in April.

The question is whether the dip in payroll gains is simply one of the minor but inevitable hiccups we will hit on the path toward recovery or is it indicative of larger issues that could result in a double-dip recession. It may be too early to tell; the next several months should provide better clues as to the sustainability of the recovery.

– John A. Challenger, Chief Executive Officer
Challenger, Gray & Christmas, Inc.

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