- Dec 5, 2005
- Reaction score
- The Derby City
- Political Leaning
- Slightly Conservative
Job growth disappoints on weak private sector hiring - Yahoo! FinanceWASHINGTON (Reuters) - Hiring by U.S. private employers slowed sharply in May, a setback for the economy's recovery, even as temporary census hiring pushed overall payrolls growth to its fastest pace in 10 years.
Nonfarm payrolls rose by 431,000 jobs on the surge in government hiring but private employment, a barometer of underlying labor market strength, climbed just 41,000, the Labor Department said on Friday.
Analysts said the data was disappointing but it was unlikely the economy would slip back into recession. Companies are already spread too thin on labor and cannot increase working hours indefinitely to maintain output, they said.
"We do not yet have the makings of a double-dip, and we still believe that private sector job creation will gradually improve over the rest of the year," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
Financial markets expected private employment to rise 190,000 after increasing 218,000 in April.
The Dow Jones Industrial Average dropped over 200 points after the sour job numbers were posted today. Of the 430,000 jobs created last month, only 41,000 were in the private sector. The rest were government jobs, primarily with the census bureau.
A whistle blower in the Census is now claiming that the Census bureau hires people, trains them, then lays them off. A few days later, they hire them again, thus a "new" job is created.
The unemployment rate dropped to 9.7% last month, so I'm sure the Obama administration will be crowing about the tiny drop, while forgetting to mention that most is due to government hiring. Private sector employment is still in the toilet.