Economy adds 431K jobs but few in private sector

A wave of census hiring lifted payrolls by 431,000 in May, but job creation by private companies grew at the slowest pace since the start of the year. The unemployment rate dipped to 9.7 percent as people gave up searching for work.

What does consensus expect? Tight credit conditions and crippling debt level with a consumption-driven, increasingly service-based economy is unlikely to create jobs above and beyond the labor force expansion for years. While the stock market can continue to rise, it does not always suggest an improving economic backdrop.

The birth/death model chart illustrates early stages liquidity injection job creation cycle. That is, mediocre job creation without heavy reliance on the birth/death model during the early stages. This will change as liquidity injection phase matures.

Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):


Source: finance.yahoo.com