JP Morgan CEO Jamie Dimon caused a stir lately when he talked about a "hurricane" hitting the US economy. We think he may eventually be right, but is way too early. The employment report for May confirmed that the US economy continues to grow.

Both major measures of jobs went up in May: nonfarm payrolls rose 390,000, while civilian employment increased 321,000. Total hours worked expanded 0.3%. Has a recession already started? Certainly not.

Notably, there is some evidence of a transition in the economy away from goods and toward services. Retail payrolls are still up from where they were pre-COVID, but dropped 61,000 in May. With the exception of the initial onset of COVID-related lockdowns in 2020, that's the steepest drop for any month since 2009. Meanwhile, jobs in leisure & hospitality increased 84,000, the seventeenth consecutive monthly gain.

In turn, this fits with recent activity on the stock market, where companies that specialize in retail goods have suffered relative to those, like theaters and airlines, which provide services. More people want to be out and about, getting back toward normal.

The worst part of the jobs report was for wages, where average hourly earnings rose 0.3%. In a normal economy, a 0.3% gain would be perfectly fine. But with consumer prices up an estimated 0.7% in May, that's no bueno for workers.