As previewed last night, the jobs “whisper” risk was to the downside, and in what was a very disappointing print released moments ago by the BLS, the whisper was spot on with only 138K jobs added in May, far below the 185K estimate, and below the lowest estimate of 140K. This was the second lowest print going back all the way to last October. Additionally, April’s big beat of 211K was revised substantially lower to only 174K, suggesting that any expectation the Fed may have had of “evidence” the recent economic slowdown was transitory was just crushed.

The change in total payrolls for March was revised down from +79,000 to +50,000, and the change for April was revised down from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. This means that over the past 3 months, job gains have averaged 121,000 per month, a far cry from the 181,000 average jobs added over the past 12 months.

To be sure, as SouthBay Research points out, a big reason for the unexpected miss was the sharp seasonal adjustment favtor, which was the biggest going back to the financial crisis days:

Wall St advances as U.S. payrolls report falls short

Not helping the Trump agenda, manufacturing jobs declined sharply, posting the weakest growth of 2017.

Looking at the Household survey revealed an even uglier picture as the number of employed workers declined by 233K to 152,923, the lowest since March.

Even worse for wage watchers, while the average hourly earnings rose by 0.2% monthly, the annual increase also missed printing at 0.2%, with April revised from 0.3% to 0.2%, while the annual increase was 2.5%, also missing the expectations of a 2.5% print. This was the lowest annual increase in average hourly earnings since March 2016.

On an absolute basis, the rebound in average hourly earnings has now fizzled completely.

While there was a silver lining in the unemployment rate which declined again to 4.3% from 4.4%, a bigger problem emerged in the participation rate which took a big step lower from 62.9% to 62.7%.