Friday jobs report could be start of 'worrying trend'

• Friday's jobs report was disappointing for everyone.
• Coupled with weak housing and auto sales, of late, the most important question is whether this is the start of a noticeable slowdown or a set of statistical quirks that occur in May.

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Friday's jobs report had nothing for everybody!

The number of jobs added to the economy was fewer than expected. The unemployment rates dropped for the wrong reasons … more people exiting the workforce. The wage data were softer than expected. And, the two prior to months' job gains were revised downward.

The bond market has taken note and 10-year Treasury yields, and the value of the U.S. dollar, are both sliding. That is not a reassuring development.

Tune into Power Lunch at 2 pm. Ron Insana will be a guest.

The data are not a total disaster. The narrowest, and broadest, measures of unemployment are at their lowest levels in years. However, the labor force participation rate also declined, offsetting that welcome news.

Coupled with weak housing and auto sales, of late, the most important question is whether this is the start of a noticeable slowdown in the economy, or a set of statistical quirks that occur in the merry month of May.

I am leaning toward the former for a couple of reasons.

With the Federal Reserve poised to raise interest rates again in June, today's data notwithstanding, and scant fiscal stimulus loaded in the Washington pipeline, this could be the beginning of a worrying trend.

Banks are backing away from extending auto credit, as the credit quality of auto loans has deteriorated lately.

Housing affordability is beginning to decline just as millennial buyers are looking for their starter homes.

Inflation rates have begun to decline again after briefly, and only briefly, touching the Fed's 2 percent target.

And, most important, consumer confidence has begun to dip, as the Trump Administration has not provided any obvious help to those who are jobless or underemployed.

Taken together, the latest data sets must give one pause. It may be time to not only reassess where the economy is, but also, where it is going.

It may be too early to tell if the economy has lost its mojo. Clearly the stock market, with the major averages at all-time highs, doesn't seem too worried.

This could be a temporary pause in what has been one of the longest, albeit slowest, economic recoveries in modern times.

We need more data.

If next month's jobs number should falter, after an anticipated rate hike from the Fed, it might be best for the Fed to voice a little less certainty about the pace of rate hikes and it might also behoove the Trump Administration to do what it promised to do and focus on ramping up the pace of growth.

That could be a herculean task, given the political hurdles the White House is currently facing.

But in a note to clients this morning, Jason Trennert, of Strategas, says the White House and Congress, worried about the 2018 mid-term elections, could jam the legislative calendar full of economic stimulants to offset the drag of political constraints.

We can only hope that is true.

If the Fed keeps raising rates and fiscal stimulus fails to come through, this will not be the last disappointing jobs number we see in 2017.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.

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