Weekly Economic Trends and Indicators

The Headlines:

Total nonfarm payroll employment in the U.S. increased by 139,000 in May according to the Bureau of Labor Statistics (BLS), exceeding expectations. April’s number was revised down from 177,000 to 147,000, and the average annual job growth was 149,000 over the last twelve months.

In a separate report, the BLS reported that total nonfarm payroll employment in the Davenport-Moline-Rock Island, IA-IL metropolitan area decreased by 100 to 181,600 in April on a seasonally adjusted basis. The most recent 3-month average growth was about 100 jobs per month, down from 400 jobs per month in March (seasonally adjusted). This was the first decrease in the 3-month moving average since November of last year, indicating a slowing of the local labor market. On a seasonally unadjusted basis, nonfarm payroll employment in the Quad Cities increased by 1,200 to 180,500, which is down by about 1,700 from April 2024.

The Details:

Nationally, most of the employment growth was in just two sectors, health care (+62,200) and leisure and hospitality (+48,000). Sectors with large job losses nationally were temporary help services (-20,200) and federal government (-22,000). A decline in temporary help is often a sign of a slowing labor market as firms tend to reduce temporary help first. The pace of federal government job declines picked up last month from a 13,000 decrease in April as the Department of Government Efficiency (DOGE) cuts took effect.

Employment in most sectors of the local economy was essentially unchanged in April. Professional and business services were up 300 jobs to 20,500, and leisure and hospitality jobs increased 500 to 17,800.

The Context:

The Federal Reserve held their policy interest rate steady at their June meeting this week, reflecting the consensus view within the Fed that the labor market is still strong enough that a rate cut is not necessary. However, the Fed’s Summary of Economic Projections acknowledged that the labor market is slowing as the median projection for the unemployment rate (currently 4.2%) increased to 4.5% by the end of the year.

Next week: Productivity update