The latest jobs data from the US is the worst for six years: 38,000 jobs created in May compared to the 160,000 expected. The market slumped on the news of the bad figures, but Yellen played them down. She said “too much attention” should not be paid to one jobs report and that she was still in favour of raising rates.
In fact, as Anthony Doyle explains in Bondvigilantes, it’s not advisable to take the US jobs reports too literally, particularly the payrolls. This is because they are subject to long revisions which produce significant distortions of up to 100,000 jobs. Furthermore, Verizon’s seven-week strike could also have affected the payrolls data, noting 35,000 fewer jobs, which will be added to the statistics for the next month.
The economic website also doesn’t think that these jobs figures are anticipating a new recession in the US.