May is good for Census jobs, but not much more
If one was hoping for good news on jobs, the latest estimates for May by TrimTabs Investment Research based in Sausalito isn’t it. The investment adviser says Census hiring — which is soon to disappear — is responsible for most job growth and the private labor markets may be weakening.
Following is the latest employment release from TrimTabs:
SAUSALITO – TrimTabs Investment Research estimates that the U.S. economy added 475,000 jobs in May, the third consecutive monthly increase.
“Investors shouldn’t let a huge headline employment print fool them,” said Charles Biderman, CEO of TrimTabs. “Temporary hiring by the Census Bureau was responsible for most of the job growth in May, while private sector job growth apparently slowed.”
TrimTabs’ employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees. TrimTabs estimates that the Census Bureau hired between 350,000 and 400,000 temporary workers in May, while the private sector added between 75,000 and 125,000 jobs.
“Census hires, the late Memorial Day, and recent tax changes threw a wrench into our employment model,” cautioned Biderman. “Estimating employment growth for this May was problematic.”
In a research note, TrimTabs explained that the economy appears to be decelerating as the Census Bureau stops hiring, government stimulus diminishes, and inventory restocking ends. Tax data indicates wages and salaries are no longer rising sequentially, growth in online job postings is slowing, and initial unemployment claims are stubbornly high.
“We are cautiously bearish on U.S. equities,” said Biderman. “We do not see how the sovereign debt crisis can be resolved without sovereign defaults or massive money printing, either of which will boost volatility and lower asset prices. An escalation of the crisis could quickly snuff out the economic recovery.”
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