**MNI DATA IMPACT: US May Payrolls Weak +75k; Earnings +0.2%>

--April Payrolls Rev Down To 224k, March Jobs Rev Down to 153k

By Kevin Kastner and Harrison Clarke

     WASHINGTON (MNI) - Payrolls growth was much softer than expected in 

May, rising by only 75,000 and following a net downward revision to the 

previous two months. The unemployment rate remained at 3.6% in April. 

     Analysts had lowered their forecasts modestly in the aftermath of 

the very weak 27,000 gain in the ADP report, but not as much as the ADP 

number would suggest. The data released today will further push the 

discussion of possible rate cuts.  

     Hourly earnings growth was also softer than expected, following an 

unrevised reading in the previous month, lowering the year/year rate to 

3.1%. 

     Here are some of the key takeaways from the data released Friday: 

     - May payrolls data were softer than expected, posting a 75,000 

gain compared with the 178,000 Bloomberg consensus and the 185,000 MNI 

survey median. This followed downward revisions to both April (+224k vs 

+263k prev) and March (+153k vs +189k prev) for a net downward revision 

of 75,000. 

     - Hourly earnings rose only 0.2% after an unrevised 0.2% increase 

in April. The Bloomberg consensus and MNI surveys both looked for 0.3% 

gain. As a result, the year/year rate for earnings fell to 3.1% from 

3.2% in the previous month. Average hours worked remained at 34.4 hours 

in May. 

     - The unemployment rate remained at 3.6% as expected, as the labor 

force participation rate was unchanged at 62.8%. The size of the labor 

force rose by 176,000, with the number of employed and the number of 

unemployed both rising proportionally. 

     - Private payrolls rose by only 90,000 in May, compared with a 

172,000 increase expected by Bloomberg and a 175,000 gain expected by an 

MNI survey. There were generally small gains across the categories, but 

a notable fourth consecutive decline in the retail sector. The largest 

gains were in the health care and leisure sectors. Government hiring 

fell 15,000 on state and local, while Federal hiring was up only 4,000 

despite reports of hiring ahead of the 2020 Census.

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]