When the Bureau of Labor Statistics announced (June 7th) that 175,000 jobs were added in May the stock market rose by 200+ points. While the number of jobs added in May exceeded expectations, a significant downward revision in April offset those gains.
Said differently, the number of jobs added in May was comparable to the monthly average for 2011. It is difficult to explain how that level of job growth could drive the market up.
The good news is that jobs are being added at a steady, albeit tepid pace.
On average, the U.S. has added 189,200 jobs per month in 2013. This compares to +185,000 workers in 2012 and +175,000 workers in 2011. In other words, job growth continues to be lackluster, but well above the average for 2010 (+85,000) and 2009 (-421,000).
At this rate, U.S. employment will return to the 2008 peak some time in 2014.
©Copyright 2011 by CBER.