The Jobs Report for May came out this past Friday and it on the face of it, it was a real winner. 431,000 jobs added is tremendous. So why did the stock market plummet 317.64 points? Because most of the hires (411,000) were for the census. I have two responses to this:
- 431,000 jobs is still a lot of people working. I don’t care of it’s temp work for the census. That means many more people are showing up at a job, paying taxes, and most likely paying bills. The census workers contract run out sometime in August so these jobs will dry up, but every month of positive gains staves off a double dip. The work week and wages improved as well.
- Although the hiring was central to one main group, the Federal government, it doesn’t mean it will end up that way. There were only 3 days for the Bureau of Labor Statistics to prepare the numbers because Monday was a holiday. The more days between the end of the month and the report the smaller the revision. I ran some very unscientific numbers based on the past year and my own records . As you can see, the deeper into the next month it goes, the more accurate the report (ignore the numbers and look at the trend). So I expect this month’s report to be improved, but when the revision comes out no one will remember the panic of this past Friday.