The nation's employment outlook continues to be just weak enough to keep the Federal Reserve in there plugging away. That would seem to be the initial read, at least, on the May employment and unemployment report.

That is because at 8:30 AM (EDT) this morning, the Labor Department reported that the nation had added 175,000 jobs in May, just a tad higher than the 165,000 initially estimated. At the same time, the unemployment rate inched up from 7.5% to 7.6% last month. A flat reading had been the general forecast.

Also, results for the prior two months were revised modestly. To wit, the payroll gain for April was pared back from the 165,000 estimated originally to 149,000 now, based on more extensive data being available. Also, the estimated jobs increase for March was raised from 138,000 to 142,000.

Keeping with this relatively stable trend is the fact that the average monthly payroll increase for the past year is 172,000. The jobless rate, meantime, edged up, as noted, from 7.5%, to 7.6%, thereby matching the March rate. Also, the report showed the number of long-term unemployed (those jobless for 27 weeks, or more) was essentially unchanged at 4.4 million. Those individuals accounted for 37.3% of the total jobless rolls. Over the past 12 months, the number of long-term unemployed has declined by 1.0 million.

At the same time, the average workweek for all workers held steady at 34.5 hours, while manufacturing hours ticked up from 40.7 to 40.8 per week. Earnings per hour also edged up just nominally, going from $23.88 to $23.89. Once more, there was a decline in the number of workers employment in the manufacturing sector. Manufacturing employment has, in fact, ticked slightly lower for the past three months.

In sum, the better pace of U.S. hiring, while most welcome, is still not strong enough, in our view, to dissuade the Federal Reserve from continuing to aggressively support the business expansion with further asset purchases. Our sense is that the nation would have to record a several-month string of increases of 200,000, or more, before the Fed would notably slow, or halt, the strong curative efforts still being applied to the economy.  Thus, this report clearly was not a game changer.     

At the time of this article's writing, the author did not have positions in any of the companies mentioned.