By Theresa Sheehan, Econoday Economist
June 1, 2022
Looking back over the pattern of the BLS employment situtation numbers versus expectations in the Econoday survey of forecasters, the outlook for the May payroll data set for release at 8:30 ET on Friday, June 3 seems to hold few surprises. The Econoday survey consensus of up 325,000 for nonfarm payrolls seems a good estimate for a labor market with plentiful job openings for available workers.
Based on historical performance, May payrolls are about equally likely to come in above expectations as below, altough the subsequent report in June is more likely to see some revisions higher than lower. With the exception of the massive upside surprise in May 2020 and the subsequent difficulties in seasonally adjusting employment numbers in the wake of the pandemic, May payroll data don’t tend to be too far off the market consensus.
May data aren’t as subject to weather impacts nor the volatility of early spring hiring in trade and transportation. Manufactuers and construction businesses have generally ramped up activity after the slower months in the winter. The May data tend to reflect the early hiring of graduates from high school and four-year colleges, and some students locking in summer jobs. There may be some hiring for summer positions for teachers and others involved in summer vacation activities for K-12 students. Most layoffs at the end of the school year won’t happen until after the end of the BLS survey reference period which included the pay period ending May 14.
Going into the May report, there’s plenty of evidence that the labor market remains strong and that businesses are anxious to hire when they can find qualified applicants.
Initial jobless claims are hovering just above the 200,000 mark which is consistent with a strong labor market. The insured rate of unemployment is holding firmly near the 1.0 percent level which is consistent with very low joblessness among workers eligible for unemployment benefits.
The data on job openings remain near historic highs with nearly two openings for every worker. Even though there are signs of slower economic growth in the second quarter 2022, the demand for labor remains high.