Time to get out of the forecasting business

The BLS jobs report was much bleaker than I had thought it would be. One can't overreact to every squiggle in the data, but the May employment numbers provide no evidence for the robust recovery scenario. Highlights:

Payroll employment: +431,000, of which 411,000 are temporary Census workers; I had thought it would be closer to +700,000

Private nonfarm payroll employment: +41,000 - close to the much-maligned ADP figure

Unemployment rate: down to 9.7%, but largely due to unemployed workers (net) dropping out of labor force

Employment from household survey: -35,000

Unemployment from household survey: -287,000

Labor force: -322

The one bright spot in the report: aggregate weekly hours rose by 0.3 percent following 0.4 percent increases in March and April. The economy continues to use more labor, but is finding it by increasing average weekly hours worked rather than new employees.

Bottom line: I can continue to be a contrarian for at least one more month.