In May, the US payrolls report came out significantly better than expected showing a decline in employment by 345 000, while the consensus was looking for a drop by 520 000. Both the March (-652 000 from -699 000) and April figures (-504 000 from - 539 000) were significantly upwardly revised. All revisions taken into account, the payrolls dropped by 257 000 less than expected. Looking at the details, 225 000 (from 274 000) jobs were lost in the goods-producing sector of which 156 000 (from 154 000) in manufacturing and 120 000 (from 230 000) in the service providing sector. Government payrolls dropped by 7 000 in May. The civilian labour force rose from 154.73 million to 155.08 million, while the number of people unemployed increased from 13.72M to 14.51M. The unemployment rate rose from 8.9% to 9.4% in May, while an outcome of 9.2% was expected. Also the temporary help agencies, that often lead overall payrolls changes, showed some improvement (-7 000 from -55 000). Education and health (44 000 from 13 000) and leisure, hospitality (3 000 from -38 000) were the only sectors that added jobs. Average weekly hours worked dropped slightly (33.1 from 33.2) and the aggregate hours worked index declined from 100.4 to 99.7. This outcome confirms that the sharp decline in employment is slowing and also the development in temporary help agencies indicates that the worst of the recession might be behind us.
Other: UK input PPI shows biggest drop since 2001
In the UK, PPI data came out very close to expectations in May. Output PPI rose by 0.4% M/M to an annual figure of -0.3% Y/Y, which is significantly below the April outcome of 1.3% Y/Y. Core PPI dropped from an upwardly revised 2.5% Y/Y to 1.2% Y/Y. Input PPI came out somewhat lower than expected at an annual -9.4% Y/Y (from -5.8% Y/Y), the biggest yearly drop in PPI since 2001.
