Tom Hudson: Will hiring be hot or cool in upcoming May report?

The U.S. economy was cool in the first three months of the year. By March, the job market, too, had chilled considerably. Only 85,000 new jobs were created that month, just a third of new positions that started in February. But by springtime, hiring had thawed again. In April U.S. employers added 223,000 new jobs.

On June 5, investors will learn if that new hiring heat continued into May with the release of the monthly employment figures.

The job market hasn’t experienced that kind of monthly ups and downs since 2012. Back then Europe was wrestling with a debt crisis, oil prices were high and the Federal Reserve was pumping $85 billion per month into the economy. Two of those characteristics have changed considerably.

The Fed has stopped its bond buying strategy and is actively talking about raising interest rates. Meantime, oil is about half as much as it was three years ago. But Europe, specifically Greece, remains in the throes of figuring out how to pay its IOUs.

It’s important to remember employment is a lagging economic indicator and companies create new jobs only after growing confident their businesses will continue to support them. A month of bad weather may delay hiring plans, but a month of bad business could derail them.

April’s rebound in hiring was encouraging that a cooling economy may be warming up again. May’s employment results will be rightly scrutinized for evidence of economic heat returning.

Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.