— Peter Morici is a Professor at the Smith School of Business, University of Maryland, and former Chief Economist at the United States International Trade Commission. The views expressed are his own. –
On Friday, the Labor Department will report employment data for May. In April, the economy lost 539,000 jobs, and the consensus forecast is for another 550,000 jobs lost in May. My forecast is for a 561,000 loss.
In Friday’s jobs report the key variables to watch are:
Jobs Creation. May 8 the Labor Department reported the economy lost 539,000 payroll jobs in April, down from 699,000 in March. However, a significant part of this improvement was a surge in temporary Census Bureau positions. The private sector still lost more than 600,000 jobs. In recent weeks, new unemployment claims have remained stubbornly above 600 thousand, and my forecast is 561,000 jobs lost in April.
Even if the economic contraction slows in the second and third quarters, job losses above 400,000 appear likely for the next several months. Job losses will top 7 or 8 million before the hemorrhaging ends.
The economy continued to contract at a 5.7 percent annual pace in the first quarter. The numbers would have been much worse but for a January surge in consumer spending.
Weak data for consumer spending and retail sales in February, March and April, notwithstanding, some analysts expect consumer spending to rebound soon.