Interpretation of US economic data on June 7: Unemployment rate rises, employment population surges, Reading recommendation: ★★★
Something delayed my interpretation of the data. Tonight’s data is quite interesting. Not only did it exceed my personal expectations, but it also seemed that the data also confused a lot of people.
data:
U.S. unemployment in May: 4%, previous value 3.9%, expected 3.9%. The unemployment rate was higher than expected and the previous value. The job market cooled and economic activity decreased. This single data is good for the risk market.
The seasonally adjusted non-farm payrolls in the United States in May (10,000 people) recorded 272,000 people, the previous value was 16.5 (17.5 before the announcement, the revised data was 16.5 when the announcement was made), and the expected value was 18.5, which was 55.42% higher than the expected value and 64.8% higher than the previous value. The single data showed that the employment market was heating up rapidly and economic activities were frequent, which led to a significant reduction in the market's expectations for the Fed's interest rate cut, which was bearish for the risk market.
The data finally obtained was contradictory. As employment data increased, the unemployment rate also increased. The originally negatively correlated data turned into a two-way positive increase. In addition, the employment data was directly and significantly bearish, causing the 4% increase in unemployment rate to be ignored.
Let's take a quick look at the U.S. employment data for May:
1. The unemployment rate was 4%, and the number of unemployed people was 6.6 million. The unemployment rate was 3.7% compared with the same period last year.
2. The number of long-term unemployed people (unemployed for up to 27 weeks) is 1.4 million, with little change year-on-year. The long-term unemployed account for 20.7% of the total unemployed.
3. The number of part-time workers has not changed much and is currently about 4.4 million. These people work part-time because their working hours have been reduced or they are unable to find full-time jobs.
4. 5.7 million people looking for work who are not recorded as unemployed because they were not actively looking for work in the four weeks prior to the survey.
5. The number of marginal workers is 1.5 million, with little change. These people want to work, but are not actively looking for jobs. The number of people who are disappointed with their jobs has increased to about 462,000.
6. The total number of non-agricultural employment recorded this month was 272,000, higher than the average of 232,000 in the previous 12 months.
7. Health care employment increased by 68,000, higher than the average of 64,000 in the previous 12 months.
8. Government employment increased by 43,000, which was in line with the expected average of 52,000 per month in the first 12 months.
9. Leisure and hospitality employment increased by 42,000, higher than the average of 35,000 in the previous 12 months
10. Professional, scientific and technical jobs increased by 32,000, significantly higher than the average of 19,000 in the previous 12 months.
11. Social assistance increased by 15,000 people, higher than the average level of 11,000 in the previous 12 months, mainly due to the increase in personal and family services.
12. Trade retail increased by 13,000 people, higher than the average level of 8,000 people in the previous 12 months. Jobs in building materials and gardening equipment increased mainly.
13. Private nonfarm hourly wages increased by 14 cents, or 0.4%, to $34.91, 4.1% higher than the average level in December.
14. The private non-farm employment market remained at 34.3 hours, the manufacturing industry was 40.1, and weekly overtime hours increased by 3 hours.
According to the overall U.S. job market data in May, we can clearly see that the number of unemployed people increased by about 700,000 compared with the previous month, but the employment exposure in May reached a value of 272,000. There are several possible contradictions in the data.
First, during the economic recovery, the economy expands rapidly and employment exposure increases rapidly. Under the premise of a good employment market environment, companies will choose to reduce wages because there is not much pressure on recruitment and the employment market. This leads some workers to choose to change jobs, and the cycle of job changes will lead to a short-term increase in unemployment.
Second, the change in the number of part-time workers, the transition from part-time to full-time, and the number of part-time workers can partially cover up the real changes in the employment market, and the number of part-time workers is as high as 4.4 million.
Third, illegal immigrants. According to unverifiable data, illegal immigrants have taken up a large number of jobs that originally belonged to Americans. In addition, the unemployment rate is recorded through household registration and enterprise surveys, and illegal immigrants are too busy hiding from law enforcement agencies to participate in household registration surveys without legal status. At the same time, many companies conceal the fact that they use illegal immigrants in order to get lower salaries. This leads to many companies seemingly having more employees, but the actual employment data that can be recorded is not much. This is also the key to the distortion of the unemployment rate. The job market has increased, but the unemployment has increased.
According to the above possibilities, the first possibility is that I really cannot convince myself that the US economy is currently recovering, so the first possibility is cancelled. Regarding the second possibility, although the data shows little change, the actual part-time job will cover up some of the real data. At the same time, combined with the third possibility, illegal immigration, this is indeed the cause of the current situation where the non-agricultural employment population has increased, but the unemployment rate has also increased.
At the same time, this situation is not accidental, but has occurred many times in the history of the US economy. However, each time it occurs, the environment is different, and sometimes it is a real economic recovery stage.
However, based on the current employment data, it seems that the possibility of the Federal Reserve talking about optimistic interest rate cuts based on the 4% unemployment rate has been greatly reduced.
