Source: Economics Group of Wells Fargo Bank, N.A. Summary
The May jobs report was on the softer side, but it was more of a caution sign than a flashing red light in our view. Nonfarm payrolls increased by 139K in May, 13K better than the consensus forecast was expecting, but a combined -95K downward revision to job growth in April and March overshadowed the beat. The industry composition of employment growth pointed to resilience in health care but weakness in more cyclically-sensitive industries like manufacturing, trade and temporary employment. In the household survey, the unemployment rate rose on an unrounded basis from 4.18% to 4.24% amid sizable outflows from the labor force.