Unexpected! Private Sector Jobs Added in May Far Less Than Forecast

Of course the headlines you'll see today will all scream out that payrolls increased by 431,000 in May. You'll have to drill down to the small print to see that 411,000 of them are temporary Census workers. So the actual 20,000 jobs added by real employers are less than half those predicted by the "experts" paid to do this stuff.

Maybe once Obama stops watching basketball and pretends he actually cares about the Gulf oil mess some more people can be employed actually cleaning it up. That'll be offset by those who'll be permanently out of work due to the oil spill, but let's not mention that since that might make him look weak and ineffective

Employers in the U.S. hired fewer workers in May than forecast, showing a lack of confidence in the recovery that may lead to slower economic growth.

Payrolls rose by 431,000 last month after a 290,000 increase in April, figures from the Labor Department in Washington showed today. The gain was smaller than the 536,000 median forecast in a Bloomberg News survey and reflected a 411,000 jump in government hiring of temporary help for the 2010 census. Private payrolls rose a less-than-forecast 41,000. The unemployment rate fell to 9.7 percent as Americans dropped out of the labor force.

Staff reductions at companies such as Hewlett-Packard Co. and Citigroup Inc. indicate a slowing in the labor market that threatens to restrain consumer spending, the biggest part of the economy. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.

“It’s going to be a long haul,” Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report. “We really aren’t adding many jobs. We’ve lost some momentum in the economy and final sales clearly aren’t enough to generate job growth.”

Payrolls estimates in the Bloomberg survey of 82 economists ranged from 220,000 to 750,000. Economists surveyed also forecast the jobless rate fell to 9.8 percent last month from 9.9 percent in April. Unemployment reached a 26-year high of 10.1 percent in October. The May figures showed the labor force shrank 322,000.

Federal hiring of temporary workers to conduct the decennial population count probably peaked last month, economists said.

The unwinding of census employment may keep distorting the payroll figures for months as the government dismisses workers when the count is completed. For that reason, economists say private payrolls, which exclude government jobs, will be a better gauge of the state of the labor market for much of 2010.