The Banking and Strategy Initiative

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US Economy: There you go, now you can bin it! – Jobs Friday / ISM for May


President Barack Obama discusses new opportuni...

President Barack Obama discusses new opportunities for job training and education for the unemployed. (Photo credit: Wikipedia)

Recovery hopes dashed by Bad News Thursday were yet eagerly awaiting the expected 158,000 Job additions in the Jobs report after a mid afternoon stock recovery. The Dow Jones is now trading another 200 points lower after the report came out with a dismal 69,000 additions leaving Obamanomics in the lurch before his most intense phase of the election even as PE alumni Mitt Romney stays on the wire ith the incumbent Barack Obama yet enjoying a 1-2 point lead in surveys.

The unemployment rate finally managed to inch up to 8.2% after a dismal showing on added jobs blanketed by revisions and drop offs from active employment even though the participation rate was back to an okay 64%.  Overall 12.7 M remain unemployed 2.4 M marginally attached to the unemployed 8.2% as having looked for a job in the past year and another 5.4 M counting as long term unemployed (42% of the 12.7 M) That makes two months of Q2 that have both added 77,000 and 69,000 jobs each while Q1 added nearly 678,000 over three months.

Services led by Healthcare added 77,000 jobs and even manufacturing added jobs. In Services, Travel and Transportation added jobs too, while Construction shed a few. The latter half of the year will show the dip from HP layoffs announced this month. Manufacturing jobs likely added their bare support from the auto industry buoyancy with 8000 jobs in Fabricated metals and 4000 jobs in basic metals.

According to the BLS report, Services started adding Net jobs since September 2009 while manufacturing started adding only since January 2010. Yet, Services have added almost three times the jobs till May 2012 at 1.4 million(M), while manufacturing added 495,000 jobs. 97,000 jobs ere added in the Private Sector in Services in May. Earnings and weekly hours data is still dismal in hours per week and pay (34hrs / $23.41) and in growth ( 0 in hours over May 2011, 1.7% in Wages)

ISM Data dips down to 53.5

Though it is not apparent from their contribution to Jobs data, Manufacturing is returning Jobs to America this decade and still in positive territory with the ISM Manufacturing New Orders index shooting to 60.2. Inventories, Suppliers Prices and customers’ inventories are deep in contraction territory meaning the new orders have to either start translating into new inventories or this is going to get worse . Apart from New Orders, Production was at 55 while Exports and imports are at 53.5, employment sub index in the ISM continuing to shout loud positives at 56.9 without any real results (+12000 jobs in May 2012)

Order Backlogs are the first common theme across the regional indices and the National ISM manufacturing number. The other common theme being the strong showing by Services sectors that should be in by Tuesday

Growth in Personal Income and Outlays as well as Construction spending

Personal Income and consumption grew by 0.2% and 0.4% in May showing off a robust series in the ongoing carnage while Construction spending is still up 6.8% Y/Y from 6% in April







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