The unemployment report last week rattled a few analysts, with payrolls increasing +160,000 when they were expecting more than +200,000. The average increase in payrolls has been +224,000 in the last six months, so this became a focus of concern, and talking heads on cable business channels said the Fed would not be able to raise interest rates this year. The unemployment rate stayed at 5.0%. It improved slightly, moving from 5.001% to 4.984%. The rate is calculated using the household survey, which includes self-employed workers and counts workers with multiple jobs only once. In this report, the data were unsettling, with a decrease in employment of -316,000, and -362,000 people leaving the workforce. Those workers don't have jobs now but are still considered to be looking for one. The number of workers who left the workforce entirely was 562,000, which was very high.

Since there is more talk about a recession, it is important to reiterate that it takes more than one ugly employment report to declare a recession, and that employment data lag an economic downturn, as they do an upturn. There are some trends in the data that look suspicious. Wages are rising slightly above inflation, but hours are about the same and recent productivity reports show serious problems there. It seems employers might be hunkering down, trying to keep their current workers, and slowing down hiring of others beyond replacing those workers who leave.

Looking at things over the last year, there are +2.49 million more people employed. Part time workers who seek that kind of work have increased, but there are fewer workers who are seeking full time jobs but working part time jobs because full time is not available. The labor participation rate fell from 63.0% in March to 62.8%, but that's better than April 2015's 62.7%. Every month, the employment report seems like it's the most important report ever. When economies are strong, no one looks at these reports in that way. For June's report, the revisions to this latest report might be the most important data to watch. The economy's weak. Still.