From Breitbart News:
Economists are expecting 650,000 jobs for May and an unemployment rate of 5.9 percent. The trouble is that it is hard to know how much to rely on this expectation after last month's catastrophe, when economists had forecast nearly four times the 266,000 jobs actually added in April. It might be tempting to turn to the estimate of the payroll company ADP. But ADP estimated 742,000 jobs last month, slightly closer to the Labor Department's number but still extremely wide of the mark.
Further complicating matters is the ongoing problem of extended and enhanced unemployment benefits. In past bouts of high unemployment, economists have observed that a significant share of those who lose their jobs tend to stay on the unemployment rolls until their benefits are about to run out, typically after 26 weeks. In our highly successful efforts to stave off economic disaster, we increased both the size of the benefits and the length of covered unemployment. As a result, many people who would otherwise be out looking for work are being paid more to stay unemployed and face no looming end of benefits.
That appears to have artificially created a labor shortage even though there are over 15 million Americans currently collecting unemployment checks from one program or another. The Fed's Beige Book featured businesses across all of the central bank's 12 districts saying that they could not find workers to fill jobs, confirming what we've heard from regional Fed manufacturing surveys and the Institute for Supply Management's survey of purchasing managers.
All of this means it is possible that we could get yet another disappointing number tomorrow. On the other hand, we could learn that April was nowhere near as bad as it seemed—if we get a big upward revision to the initial estimate. As we've said before, we're in an unprecedented recovery from an unprecedented crisis. The best thing to expect is a confounding of expectations.
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