The closely watched monthly employment report released today showed non-farm payrolls increased only by 78,000 (vs. about 175,000 consensus). However, the unemployment rate, which is based on the separate household survey, fell slightly to 5.1% from 5.2%. The lower jobs figures was not entirely a surprise as many economists expected a drop-off from the strong 274,000 number in April was was unrevised. Overall, the market is not seeing this specific report as worrisome enough to deter the Fed from its current tightening cycle. Average monthly payrolls so far this year is running about 180,000, largely unchanged from last year and above the 150,000k per month 'line'. I would expect that the weekly jobless claims will be watched a bit more closely.
Larry Kudlow's take is here. He's quite excited about the strength of the household survey.