On the May Jobs Report

More payrolls than April, but another big miss. Tiny upward revisions to April and March explain little of it. The unemployment rate fell because the labor force shrank despite a booming re-opening. 1.4 million fewer workers this month reported being unable to work due to pandemic-related business closures, yet payrolls grew by less than half that. Average hourly wages moved up at an annual rate of over 6% across the entire employed labor force, implying enormous premiums to new workers primarily in low-wage sectors. 25 governors have opted their states out of the enhanced unemployment benefits programs that are paying people more not to work than to work, and holding back labor market recovery. This will start taking effect this month.