June 3, 2016
By Peter Bower
We recently got a monthly employment number for May that was disappointing. The labor department reported that only 38,000 new jobs were created for the month. The trend has been higher than 100,000 per month. The unemployment rate also fell to 4.7%; the lowest number in years. One number indicates a weakening trend and the other points to an economy at full employment. What is going on here?
It may mean that employers have caught up with their needs, things are moving on quite nicely, and a falloff in hiring is inevitable. Along with this, it may mean that productivity is picking up so growth can be handled with the current workforce. The alternative view is that this economy has peaked out and on a downhill slide. This is possible, but would be about the first time in history that an economy went in decline without some kind of economic shock or major event. This is unlikely so stay steady my friends.
The Lonely Bull
