What to expect from the May jobs report
The May jobs report is expected to add an estimated 185,000 jobs for the month and it comes after Wednesday’s ADP report which showed the private sector added 27,000 jobs in May, the lowest in nine years.
EmployBridge president & CEO Joanie Courtney said she believes the biggest concern with the ADP report was how many jobs were cut by small businesses.
“The biggest concern with the ADP report was really that small businesses cut 52,000 jobs and that is concerning. If you look at the midsize and large employers, they actually added jobs which was much stronger,” she said on FOX Business’ “Making Money with Charles Payne” Thursday.
Looking ahead to Friday, Courtney said that one area in particular she will be looking at closely are how many service jobs are added.
“I think when we look at tomorrow, I’m really looking to see are we going to have jobs coming back in the goods producing area, manufacturing, construction, because that’s what we really need in this economy right now. The service jobs are out there but we see a struggle, it has slowed down a little bit in manufacturing.”
Courtney expects the biggest concern of the jobs report to be labor force participation.
“There are over 500,000 manufacturing jobs, over 400,000 jobs in logistics, there’s jobs in transportation. We need more people participating in the work force and actually going after those jobs because there’s lots of opportunity, there’s training, wages are on the rise,” she said. “We don’t have enough people going after those jobs and that could impact tomorrow’s number.”
Bullseye Brief founder Adam Johnson points out that even if the jobs report comes out below expectations, it's still good news for the market.
“We are back to the point now where bad news sort of becomes good news because it means the Fed is going to lower rates. You never really want to see that. I would much rather have the Fed sort of on the sideline to say we will do what we need to do but still get our jobs,” he said.
Johnson admits that he's not as optimistic about Friday’s figures due to the “deterioration in some of the headline numbers.” He believes the job figures are going to be negatively impacted by the market's uncertainty over trade.
"If you don’t know what’s going to happen with China and you don’t know what’s going to happen with Mexico, you won’t be as aggressive spending money. We might be in for a little softness tomorrow and I’m okay with that."
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Despite Johnson's belief that the jobs number will be significantly lower than expectations, Courtney believes wages will continue to rise because the market is tight due to low labor participation and low unemployment.
“Today there are 7.5 million job openings and only 5.8 unemployed people that are actually looking for work. So we have a real gap and not only is it a skills gap, but its talent. So that’s only going to drive employers to have to pay more competitively,” she said.