BOB MOON: Just when our economic engine is sputtering, employers have slammed the brakes on hiring. The 54,000 jobs added last month fell far short of the pace we need just to keep up with new arrivals to the labor market. And the unemployment rate has drifted back up, to 9.1 percent.
Live on the line with us now is Gus Faucher, head of macro-economics at Moody’s Analytics. So we’ve noted the dark spots. Can you find any rays of hope in these numbers?
GUS FAUCHER: A couple of things. The household employment number — that comes from a different survey — that was up. And the then labor force is expanding. That’s one reason why the unemployment rate was higher, is because more people are out looking for work. And that’s a good sign that people are more confident about the labor market. So we may see the unemployment rate even move a bit higher in the near term, but I take that as a positive rather than a negative.
MOON: Can we take any comfort in the hope that these aren’t necessarily the final numbers for May? I mean these numbers always get revised, could they end up looking much different?
FAUCHER: I don’t think they’ll end up looking much different. They could get revised somewhat, but I think it’s a poor month. I mean there’s absolutely no question about that. Private business hiring was weak, government was cutting jobs and the revisions aren’t going to change that story.
MOON: Do you think this is going to change any minds at the Federal Reserve though about halting the printing presses? I’ve heard some folks argue without all that money to goose spending, things could get even worse.
FAUCHER: Well, I don’t think the Fed is going to make a decision based on one month of data. The past three months have been quite strong, I think underlying job growth isn’t the 53,000 that we got but I think it’s somewhere closer to about 150,000 per month or so. So I think the Fed is going to wait a month or two. If we get more numbers that look like this, then yes. I think we could see the Fed take stronger action.
MOON: Gus Faucher at Moody’s Analytics, thanks for your insights.
FAUCHER: Thank you.
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