Payroll employment dropped to 38,000 in May. The strike at Verizon shaved about 35,000 jobs from the total, but doesn’t fully explain the weakness. Revisions to March and April were to the downside. That means the labor market was not only weaker as we moved into the second quarter, but was already losing momentum in the first quarter. Moreover, losses were much deeper and more broad-based than expected, which will push the Federal Reserve back to the sidelines. June is off the table for a rate hike; July is now a stretch.
The only sector to show real momentum