Employment numbers today suggest that we could get a Goldilocks May job report tomorrow.
The ADP Research employment survey said U.S. private employers added 742,000 jobs in May. That’s the most in seven months. But it is slightly below the 850,000 projected by economists surveyed by Bloomberg.
In other words strong enough to alleviate fears that the shockingly low 266,000 jobs added in April signaled a premature slowdown in the U.S. economy. But not so strong as to revive fears from the days when the economy was adding nearly 1 million jobs a month that the strength of the labor market would push the Federal Reserve into raising rates sooner than expected.
Goldilocks–with the porridge not too hot and not too cold. But just right.
The weekly report on initial claims for unemployment fed into this potential scenario. New claims for unemployment in regular state programs fell for a fourth straight week to set a new 14-month low. For the week ended on May 22, workers filed 406,000 new claims.
That was below the 425,000 expected by economists–but not shocking lower than expected.
Continuing claims in regular state unemployment programs for the week ended May 15 fell to 3.642 million against 3.680 million expected by economists.
The major indexes fell today ahead of tomorrow’s jobs report. The Standard & Poor’s 500 was down 0.36%. The Dow Jones Industrial Average lost 0.07%. The NASDAQ Composite dropped by 1.05% and the NASDAQ 100 slid 1.07%. The small cap Russell 2000 closed down 0.81%.
Fear rose slightly as measured by the CBOE S&P 500 Volatility Index (VIX). The VIX moved higher by 3.20% to 18.04 for the day.
