The bulls seem to like the May job's number and running this market up. I personally do not trust the 345,000 payroll lost number. Let's see where that number is 2 months from now. I'm sure this number is adjusted based on historical data that will be revised next month or so. The method works when there is stability and markets are normal. This labor market is so dynamic that you need to analyze the corrections. The DOL are doing their best but their models are not keeping up with this downturn. I know that employment is a lagging indicator but until corrections make the number neutral or better (bullish), I will not be long based on this data alone. The trend is not changing. Once this trend changes, is when it's time to be bullish based on employment data.
The change in total nonfarm employment for March was revised from -699,000 to -652,000 or a 7% correction. The change for April was revised from -539,000 to -504,000 or a 7% correction too. Every month this year, the numbers have been revised up (bearish) and by significant amounts.
You also have statically games like "marginally attached" to the labor market. These people represent 16.4%. A year ago, this number was in the 9%'s. Keep in mind, during the 30's, these games were not played with the numbers. This is a way to soften the perception of the labor market. So be careful when you hear historical comparisons since they may be different kind of apples. Dive deeper into the numbers.
The bottom line was the street was expecting unemployment being at 9.2% and it came in at 9.4%. Unemployment has jumped by 1% since March and the trend has not changed. If, or more likely when, the May number gets revised to the negative, this could push the number into the 9.5-9.7%.
Look at Chart 1 in the DoL raw data (link below). The trend is not letting up.
As people loose their jobs, the fundamentals of a consumer driven economy are not changing. You are going to have more prime, credit card, and auto defaults. The retail numbers were bearish too. These are all indications of this weak labor market.