The May jobs report is in, and while decent numbers were posted, a common recession signal was also visible in the data.
The headline jobs number was 339,000 created in May, below the 12-month average of 341,000 jobs added per month, but still above analyst estimates. Most gains were in progressional and business services, while government employment accounted for about an eighth of jobs added.
Despite the positive growth, the unemployment rate rose to 3.7% (against the estimate of 3.5%) despite the labor force participation rate being unchanged. The prime-age labor force participation rate (which is of workers aged 25-54) did tick up slightly, however.
In covering the jobs report live, CNBC’s Kelly Evans pointed out that despite positive job growth, a common recession signal is close to being breached. "The increase in the unemployment rate is much worse than expected ... usually when we rise by a half a point from the lowest unemployment rate, it means the economy is going into recession. We just rose three-tenths in a month," Evans explained.
The economy had suffered two consecutive quarters of negative economic growth last year, which meets the technical definition of a recession. In response to that, the Biden administration launched a campaign to cast doubt on what the definition of a “recession” is to avoid negative media coverage.
Matt Palumbo is the author of Fact-Checking the Fact-Checkers: How the Left Hijacked and Weaponized the Fact-Checking Industry and The Man Behind the Curtain: Inside the Secret Network of George Soros
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