Jobs numbers point to slower hiring
The excuse they are going to be using - that the spring was unusually warm and this tilted the summer numbers forward -- will work until about August. After that, they'll have to come up with some other excuse for the paltry jobs numbers.
Private payroll growth accelerated only slightly last month and claims for jobless benefits rose last week, suggesting the labor market recovery was stalling after a strong performance early in the year.
Other data on Thursday showed economic growth in the first quarter was a bit softer than initially estimated, with businesses restocking shelves more slowly than previously thought and government spending declining more sharply.
"It shows we're in a lackluster period in the economy right now," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.
Private employers created 133,000 jobs in May, payrolls processor ADP said. That was below economists' expectations for 148,000 jobs.
The report comes ahead of Friday's closely watched employment report for May, which is expected to show that nonfarm payrolls increased 150,000, up from a paltry 115,000 in April. Job creation accelerated between December and February as the economy got a boost from an unusually warm winter.
While economists have largely shrugged off the recent cooling in the labor market as payback for strong gains during winter, there are signs of fundamental weakness.
Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 383,000, a Labor Department report showed. Claims have now risen in seven of the last eight weeks.
Another report showed the number of planned layoffs at firms rose to an eight-month high in May as computer maker Hewlett-Packard said it would cut about 8 percent of its workforce.
Employers announced 61,887 jobs cuts this month, a surge of 52.6 percent from 40,559 in April, according to consultancy Challenger, Gray & Christmas Inc. The computer industry accounted for 27,754 of the planned jobs cuts.
A gain of 150,000 jobs simply isn't going to cut it. That, along with anemically slow growth once again raises the possibility that any kind of a shock to the system - a Greek exit from the euro or a Spanish bankruptcy -- could send us back into a recession.