May payrolls fell by just 345k, much better than estimates of a drop of 520k and the two prior months were revised higher by 82k. However, due to a 437k fall in the household survey and a rise in the labor force, the unemployment rate fell to 9.4%, .2% more than expected at to the highest since Aug ’83. The U6 rate rose to 16.4% from 15.8%. There was a big drop in the level of construction firings as they fell just 59k following 4 months of triple digit declines. Financial services also shed just 30k jobs and Retail jobs fell 18k, both better than recent trends. Education/health added 44k which is above the recent trend. Leisure, hospitality added 3k and temp jobs fell just 7k, a big improvement. Govt jobs fell by 7k, led by the fed’l govt (amazingly). A caveat in the beat was the B/D model which added 220k, 44k more than May ’08 which is a statistical fluke as the economy is worse today than it was in May ’08, thus today’s # is overstated.
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