The Verizon strike 2016, where nearly 40,000 workers walked off from their jobs, has had a massive hit on May's jobs report. It is also expected to affect June's report.
The Wall Street Journal reported that the work stoppage, caused by the Verizon strike 2016, has reduced May's payrolls figures by about 35,000, as per the Labor Department. The seven-week strike ended last Wednesday, Jun. 1.
According to CRT Capital rates strategist Ian Lyngen, the impact of the strike is "nowhere near enough to justify the weakness in the overall numbers." Contributing to the measly 38,000 increase in May jobs is the 15,000 head count drop from construction, 11,000 cut in miners and the deduction of 10,000 jobs by manufacturers.
Even when the Verizon strike 2016 participants were added to the count, the May payrolls only increased by 73,000. Goldman Sachs economists have said that their estimate, adjusted for the strike, was 200,000. This is equal to the average increase over the next three months.
Another problem that affected May's figures was a missing offset from temporary hires. Apparently, temp workers decreased by 21,000 last month.
"Labor markets are much tighter now than they were in 2011," Barclays economist Jesse Hurwitz said. This decline is believed to be a leading indicator of total service-sector employment.
Reuters noted that employers hired 59,000 fewer workers in March and April. Unemployment rate fell to 4.7 percent in May, which is the lowest since Nov. 2007. This is said to be caused by 458,000 Americans giving up on their search for work.
"This is not a good report, and it may well give Fed officials second thoughts about increasing interest rates again this month or next, as some have suggested lately," Boston College economics professor Peter Ireland said.
The Verizon strike 2016, according to Labor Notes, has proven that corporate giants can still be beaten. It showed that the workers still "wield real power."
"The very same managers that ride us, that are constantly on us about our productivity every time we blink," FiOS tech Dennis Dunn said. "They have no clue how to do our job. It's comical."
