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Speaker 1: This is a Bloomberg Business flash from Bloomberg World Handquarters.
Speaker 1: I'm Charlie Pellet. Stocks are declining as the SMP five
Speaker 1: hundred index slips from a seven month high after disappointing
Speaker 1: a roll gains heightened concerns of growth is fading. The
Speaker 1: SMP five hundred index down nine points now at two
Speaker 1: thousand ninety six, to drop there of point four percent.
Speaker 1: Nastack is down thirty six points, the drop of seven
Speaker 1: tents of one percent down, Industrials down fifty seven, a
Speaker 1: decline of three tenths of one percent. The tenure up
Speaker 1: twenty six thirty seconds with the yield of one point
Speaker 1: seven percent. Gold rallying thirty one dollars the ounce to
Speaker 1: twelve forty three, a gain of two and a half percent.
Speaker 1: West Texas Intermediate Crude is down seventy nine cents to
Speaker 1: forty eight thirty seven, and Barrel a drop there of
Speaker 1: one point six percent. I'm Charlie Pellot. That's a Bloomberg
Speaker 1: business splash. You're listening to taking stock with Kathleen Hays
Speaker 1: and pim Box on Bloomberg Radio. US companies slowing their
Speaker 1: hiring in May to just thirty eight thousand jobs. The
Speaker 1: unemployment rate, though it fell as many people dropped out
Speaker 1: of the workforce. Here to tell us more about today's
Speaker 1: report is Heidi Scherholtz, Labor Secretary. Tom Paris is chief
Speaker 1: economist at the Department of Labor. Heidi, thank you very
Speaker 1: much for being with us. Oh, thank you for having me. Now,
Speaker 1: I want to give you first the opportunity to just
Speaker 1: explain a little bit about your takeaways from this report,
Speaker 1: and then I just want to ask you about job opening.
Speaker 1: So go ahead, gotcha. So the number, when we saw
Speaker 1: the numbers, they were below expectations. Um. But a key,
Speaker 1: big chunk of what was of the softness in today's
Speaker 1: numbers was the Verizon strikers who are out on strike.
Speaker 1: The good news on that is that those workers are
Speaker 1: now back on the job. Um. If you add those
Speaker 1: Verizon strikers to the thirty eight thousand jobs we get,
Speaker 1: you're into this. You're into sort of the seventy seventy
Speaker 1: five thousand range that and sort of. So if that's
Speaker 1: more the underlying job growth that we saw in May
Speaker 1: It's still pretty weak, isn't it. Because we were averaging
Speaker 1: we were averaging two hundred thousand plus. Then we ranched
Speaker 1: it down about a hundred and sixty net new jobs,
Speaker 1: and to suddenly dive down to seventy thousand and change
Speaker 1: is quite a pullback hiding. And of course there were
Speaker 1: other signs of weakness. That unemployment rate fell because so
Speaker 1: many people left the labor force. He said, Typically the
Speaker 1: kinds of things you see when the labor market is
Speaker 1: getting weaker, not stronger. What do you think is going on?
Speaker 1: So one thing to always keep in mind is that
Speaker 1: these numbers are really volatile months to months. So anytime
Speaker 1: of the week month we don't get too upset, and
Speaker 1: time there's a really strong month, we don't get too
Speaker 1: giddy about it. If you look over the last three months,
Speaker 1: it's a much more stable measure. That, though, is still
Speaker 1: lower than what we've been seeing. So if you look
Speaker 1: at job growth over the last three months is a
Speaker 1: hundred and sixteen thousand, that's lower than the rates we
Speaker 1: were seeing in two fifteen UM. One point on that, though,
Speaker 1: is that as the labor market tightens, those are the
Speaker 1: kinds of numbers we may expect to see going forward.
Speaker 1: It's sort of as you get close. We're not there yet,
Speaker 1: but as you get closer to have a really tight
Speaker 1: labor market, you're just gonna see the job growth slow
Speaker 1: a little. One of the things that helps to to
Speaker 1: or sort of comes along with that, is that we
Speaker 1: will also start seeing faster wage growth, and we did
Speaker 1: see stronger wage growth so far this year. We're seeing
Speaker 1: an annualized rate of wage growth at three point two percent.
Speaker 1: So what's going on right now is not completely unexpected,
Speaker 1: but we do where we will be looking to next
Speaker 1: month to see into definitely monitoring the situation to see
Speaker 1: if we're if we see that UM rebound next month,
Speaker 1: I do you know, I don't want to put lipstick
Speaker 1: on a pig here, But looking at the job's openings
Speaker 1: report from last month five point eight million job openings
Speaker 1: as of the last business day of March. That's from
Speaker 1: the Bureau of Labor Statistics, is it possible that the
Speaker 1: statistics that we're talking about today matter slightly less because
Speaker 1: there is a job's mismatch that is only being intensified
Speaker 1: because all those people that have the skills that are
Speaker 1: wanted by employers already have jobs or job offers, so
Speaker 1: the job One of the things that job openings numbers
Speaker 1: highlight is a great deal of churn that goes on
Speaker 1: in any labor market. So there were also I'm not
Speaker 1: going to get this number exact, but I think there
Speaker 1: were about five point five million hires in the in
Speaker 1: March five point three. There you got, Okay, So the
Speaker 1: so the most of those job openings get filled every
Speaker 1: month because you just have a lot of you just
Speaker 1: there's just a sort of, um perhaps surprising amount of
Speaker 1: turn in the labor market. But one thing that I
Speaker 1: do think those strong job openings numbers point to is
Speaker 1: that the softer jobs numbers we UH saw today are
Speaker 1: happening in this context of a lot of other economic
Speaker 1: indicators that are much stronger. So the jewels numbers were strong.
Speaker 1: We also see strong retail sales, strong consumer spending. Unemployment
Speaker 1: insurance claims have been below three hundred thousand per week
Speaker 1: for the last sixty five weeks. That's the longest record
Speaker 1: for the longest streak below three three UM. So there's
Speaker 1: other indicators out there that suggests um that the fundamentals
Speaker 1: of the labor market are still quite strong. Gets it
Speaker 1: is definitely a mixed picture because you've seen a lot
Speaker 1: of weakness in manufacturing numbers. Uh this you know, it
Speaker 1: isn't across the board. If you manufacturing a weak spot,
Speaker 1: a strong dollar, etcetera. Although the services component of this
Speaker 1: job report is troubling because services in a normal month,
Speaker 1: services jobs are up at least hundred and fifty thou
Speaker 1: this latest month, private services up only around seventy thousand,
Speaker 1: so that seems to be troubling. And another thing, the
Speaker 1: hours worked actually pulled back a bit that correlates with GDP.
Speaker 1: That's another sign of perhaps a slowdown. Something hit the
Speaker 1: economy in May. But I take your point, maybe it
Speaker 1: tause it's been so strong now it's slowing down. I
Speaker 1: think that ours work remained flat. It was something that
Speaker 1: I remained flat at thirty four point four hours on
Speaker 1: as the average link of the work week. It was
Speaker 1: that's the same as it was a month ago, which
Speaker 1: is something that I track closely because exactly what you're
Speaker 1: talking about. One thing that you we wouldn't want to
Speaker 1: see is ours declining and a week job jobs numbers
Speaker 1: because that can indicate larger softness. And so the fact
Speaker 1: that ours remained sort of in the band we've been
Speaker 1: seeing in the recovery. UM there's somewhat down from where
Speaker 1: they were a few months ago, but in May had
Speaker 1: bedn't declined further, and so UM actually thought of that
Speaker 1: as an encouraging sign that we, you know, hours held
Speaker 1: on even though the job numbers were some of the
Speaker 1: lok okay hid Thank you so very much for joining
Speaker 1: us chief economists of the Labor Department. Hey, there's a
Speaker 1: red hot sticky out. Turns out that there's a minority
Speaker 1: stake in Lebron's Cleveland clavind leers to be said to
Speaker 1: be for sale. I mean, is that because they lost
Speaker 1: last night to the Golden State Warriors will find out
Speaker 1: this is wimbed radio coming off. On taking stock, Will
Speaker 1: the Federal Reserve race interest rates in June or July
Speaker 1: after these week employment figures for May or will they
Speaker 1: wait until September. That's next on taking stock