The latest overall job loss numbers showed a loss of 49,000 jobs in May and a jump in unemployment rate up to 5.5%. The drop is still well below the six figure numbers seen in past recessions.
Additional background information:
We asked our panel:
Does today’s jobs report spell recession?
The Kudlow Caucus Breakdown
A couple of hundred thousand college kids can’t get summer jobs because the economic flat-earthers in congress just hiked the minimum wage and priced the kids (110% of whom plan to vote for Obama) out of the job market.
Fraternity pizza-budget impact: substantial.
GDP impact: minimal.
Seeing markets react to stupid congress just the way we said they would: priceless.
Art LafferFmr. Reagan Economic Advisor
Chief Investment Officer, Laffer Investments
Today’s jobs report is confirmation of the slowdown/recession—and there’s more to come.
The jump in the unemployment rate was due more to the increase of the size of the workforce than a reduction in the number of employed. That increase may be a seasonal peculiarity, but in a recession you surely don't see the workforce increasing. Besides, the unemployment rate announced today, 5.5% is very low in absolute terms. In fact, it is the average rate experienced in expansions, not recessions.
A. Gary Shilling & Co. President
The leap in the unemployment rate from 5% to 5 1/2% and the jump in the number unemployed by over 10% confirm recession. The drop in temp firm payroll jobs foreshadows more job cuts and the deceleration in restaurant and bar employment says consumers are desperate for money. Payroll losses are understated since the birth/death model added 217,000 jobs, an improbable 42,000 in construction. And finally, with falling real wages, inflation continues to be a commodities only phenomenon.