May jobs report: 175,000 jobs added, jobless rate up at 7.6%

posted at 8:33 am on June 7, 2013 by Ed Morrissey

Surprise!  As it turns out, all of the indicators this week took far too pessimistic a view of the American economy.  The May jobs report from the BLS doubled up on expectations, with a growth of 175,000 jobs while the unemployment rate remained steady:

Total nonfarm payroll employment increased by 175,000 in May, and the unemployment rate was essentially unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and retail trade.

Both the number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were essentially unchanged in May.

The expectations were closer to 88K, according to Reuters yesterday.  The previous two months got adjusted slightly downward overall.  March added 4,000 more jobs than first thought to 142K, while April dropped 16,000 to 149K.

The U-3 number of 7.6% actually went up a tenth of a point, but that looks like a rounding issue rather than a significant rise.  The U-6 metric dropped by a tenth of a point to 13.8%, matching March for the lowest rate of the year.  It’s also a full percentage point lower than a year earlier.

The number of people not in the workforce dropped by 221,000 at the same time in the Household Data report.  The number of those not in the workforce but who want a job rose, though, by almost 300,000 to roughly the same level as March; April’s sharp drop looks like a polling outlier.  The workforce participation rates held steady or improved; employment-population ration remained at 58.6%, where it has been nearly all year, and the civilian labor force participation rate rose from its generation-low 63.3% of the previous two months to 63.4% in May.

CNBC notes the surprising results:

Despite anticipation of a spring-into-summer swoon, the U.S. economy continued to create jobs at a relatively steady pace in May, adding 175,000 positions as the unemployment rate ticked higher to 7.6 percent. …

The May payrolls number has been both low and volatile over the past several years, with an average initial reading of 69,000 and an average upward revision of an additional 99,000 positions.

Other jobs numbers had pointed to a slowdown.

The Institute for Supply Manufacturing surveys of both the manufacturing and nonmanufacturing sectors pointed to flat growth, while the ADP/Moody’s Analytics survey of private payrolls earlier this week came in considerably lower than expected.

This still isn’t a great jobs report.  It’s just better than expected.  The US economy needs ~150K new jobs each month to keep up with population growth, so this is just a little better than a maintenance level for job creation.  At this rate, it would take 320 months to make up for the 8 million jobs lost during the Great Recession and the Incredibly Lousy Recovery over the last six years.

Basically, we treaded water, which is always better than sinking, but it really doesn’t get you anywhere.

Update: I changed the headline from “steady” to “up,” although I think the increase is probably at the level of a rounding change for both U-3 (up) and U-6 (down).  It’s still “up” even if the real-world impact at the averaging level is “steady.”

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Good news!
-lsm spin

cmsinaz on June 7, 2013 at 8:36 AM

So another big yawner. Decent jobs number offset by lack of people in the workforce? Funny how the UE goes down when the jobs number is anemic but when its reasonably good it doesn’t move.

crazywater on June 7, 2013 at 8:36 AM

Job gains were revised up in March from 138k to 142k, April was revised down from 165k to 149k

Spock eyebrow raised…

So long as they can keep shuffling a few tens of thousands jobs around they can erase the losses and keep showing steady job rates…

Skywise on June 7, 2013 at 8:37 AM

Modest but the recovery is working
-ezra klein

cmsinaz on June 7, 2013 at 8:37 AM

Are we in Recovery Summer part 2 or part 3? I can never remember.

thuljunior on June 7, 2013 at 8:39 AM

7.5 to 7.6% is steady?

Viator on June 7, 2013 at 8:40 AM

Sweet! Only 15 million more jobs to go and we’ll be back to 2007 levels.

Give Barky time, he’s only had 4.5 years to get this done.

Bishop on June 7, 2013 at 8:41 AM

CNBC Reporter-ette: “I’ve been told that we will only need 80k, and soon only 40k new jobs to keep the unemployment rate falling”. ?

Where did she get this information? From the NSA?

Rovin on June 7, 2013 at 8:41 AM

175,000 is stagnant. Isn’t that just keeping up with the growth in population? That’s been the norm for much of the Obama Presidency. If that’s now considered “good”, we’re never gonna see a real recovery.

Doughboy on June 7, 2013 at 8:42 AM

7.7%

Lucano on June 7, 2013 at 8:42 AM

Rounding makes the jump in the U-3 look worse than it is. Unrounded, the increase is 0.0446 percentage points (from 7.5104% to 7.5550%).

U-5 and U-6 dropped by a rounded 0.1 percentage point, to a not-fully-seasonally-adjusted 8.8%/13.8% respectively. The bad news – the number of people who want a job but aren’t counted as unemployed (even in the U-5/U-6) spiked in seasonally-adjusted terms from 6.14 million to 6.71 million, which means the very-long-term unemployed (those who last looked for work more than a year ago) is still growing significantly.

Steve Eggleston on June 7, 2013 at 8:42 AM

Are we in Recovery Summer part 2 or part 3? I can never remember.

thuljunior on June 7, 2013 at 8:39 AM

Well part 1 was in 2010 when we had a recovery summer. We could say this news is just commemorating that 2010 recovery summer we had?

LaughterJones on June 7, 2013 at 8:43 AM

Labor force participation rate in latest jobs report at 1979 level.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/06/LFP%20May.jpg

Viator on June 7, 2013 at 8:43 AM

Modest but the recovery is working
-ezra klein

cmsinaz on June 7, 2013 at 8:37 AM

Yeah, right. I work in an industrial park ghost town. twenty buildings, two occupied. Business is just booming.

175k is not a great number. 350k people just filed for unemployment LAST WEEK.

dogsoldier on June 7, 2013 at 8:43 AM

…I don’t believe them anymore!

KOOLAID2 on June 7, 2013 at 8:44 AM

which means the very-long-term unemployed (those who last looked for work more than a year ago) is still growing significantly.

Steve Eggleston on June 7, 2013 at 8:42 AM

It sure is.

dogsoldier on June 7, 2013 at 8:45 AM

Are we in Recovery Summer part 2 or part 3? I can never remember.

thuljunior on June 7, 2013 at 8:39 AM

Wreckovery Summer Part Four – The Smell of Fear

Steve Eggleston on June 7, 2013 at 8:45 AM

James Pethokoukis: 11.4%: What the US unemployment rate would be if labor force participation were back to January 2008 levels

Also says it will only take 58 months more to get to 5% UE at this rate… Happy days.

crazywater on June 7, 2013 at 8:48 AM

Ezra Klein ‏@ezraklein 6m
Remember that when we really recover, unemployment rate will temporarily rise as people return to workforce.

Warning Will Robinson!!!!

Rovin on June 7, 2013 at 8:49 AM

On the part-time front, there’s good news and there’s bad news. The good news – fewer people are being forced to part-time due to slack work/business conditions (down from a seasonally-adjusted 5.06 million in non-agricultural industries to 4.78 million). The bad – more people are finding only part-time work (up from a seasonally-adjusted 2.45 million in non-agricultural industries to 2.69 million).

The news isn’t good on the self-employed front either – the unseasoned numbers (both incorporated and unincorporated) are down from last year, and the seasoned unincorporated number (incorprated self-employed is not seasoned) is down from last month.

Steve Eggleston on June 7, 2013 at 8:54 AM

7.5 to 7.6% is steady?

Viator on June 7, 2013 at 8:40 AM

I hear ya. See the update and changed headline.

Ed Morrissey on June 7, 2013 at 8:57 AM

I hear ya dogsoldier

cmsinaz on June 7, 2013 at 9:03 AM

Rovin on June 7, 2013 at 8:41 AM

I think she said Chicago Mercantile.

She didn’t specify why, but the impression was Boomer retirement.

Except, I have to wonder if someone is not factoring in Boomer disability. (and suicide rates). To stay on disability, you have to get employment clearance, so they should be removed from the active seekers/full-time equation.

I don’t mean the official BLS, but people at the Mercantile could be using Retirement + Disability + Unemployment Purge averages as a way to get the number down from 150K to 88K.

budfox on June 7, 2013 at 9:04 AM

James Pethokoukis: 11.4%: What the US unemployment rate would be if labor force participation were back to January 2008 levels

Also says it will only take 58 months more to get to 5% UE at this rate… Happy days.

crazywater on June 7, 2013 at 8:48 AM

Oddly, that 11.4% what the unemployment rate would be if we counted the 6.71 million who aren’t counted but who want a job. The bad news – that was 11.2% last month.

So much for the rounding-error drop in the U-4 through U-6 rate.

Steve Eggleston on June 7, 2013 at 9:06 AM

The bad news – the number of people who want a job but aren’t counted as unemployed (even in the U-5/U-6) spiked in seasonally-adjusted terms from 6.14 million to 6.71 million, which means the very-long-term unemployed (those who last looked for work more than a year ago) is still growing significantly.

Steve Eggleston on June 7, 2013 at 8:42 AM

That’s what I’ve been alluding to with the Unemployment reports.

We’re going through a heavy purge of unemployment rolls, forcing some onto disability, some into full part-time, some into destitution, and others into suicide.

budfox on June 7, 2013 at 9:07 AM

I really wish Preznint Bush would quit screwing around and….

Wait…What? Bush isn’t…Ummmm…

Never mind!

Liam on June 7, 2013 at 9:08 AM

I think she said Chicago Mercantile.

She didn’t specify why, but the impression was Boomer retirement.

Except, I have to wonder if someone is not factoring in Boomer disability. (and suicide rates). To stay on disability, you have to get employment clearance, so they should be removed from the active seekers/full-time equation.

I don’t mean the official BLS, but people at the Mercantile could be using Retirement + Disability + Unemployment Purge averages as a way to get the number down from 150K to 88K.

budfox on June 7, 2013 at 9:04 AM

I’m plowing through the age subgroups’ labor force participation rate now. Give me a moment to see whether the long-anticipated Boomer retirement has actually started or whether the trend of the old holding jobs that the young would otherwise hold continues.

Steve Eggleston on June 7, 2013 at 9:10 AM

But I hear Verizon is hiring like crazy.

And the NSA, the IRS and the DOJ.

Hi, Janet.

PappyD61 on June 7, 2013 at 9:12 AM

Let’s bring in 40 million new immigrants over the next 10 years. We would only need to create an additional 333,000 jobs per month to employ them all. Grover Norquist and Holtz-Eakin said it would be good for us./

Wigglesworth on June 7, 2013 at 9:13 AM

When do the new college graduates get added in, or do they go directly to grad school?

Fallon on June 7, 2013 at 9:14 AM

I hear ads on the radio that the Post Office is hiring.

Wigglesworth on June 7, 2013 at 9:14 AM

Suggestion: Start a new trend here and stop worshiping the U3 rate and start reporting the actual numbers it’s computed on then give us a U3 rate that counts all those people who’ve dropped out of the job market and see what that rate is. This is all just a bunch of BS.

stukinIL4now on June 7, 2013 at 9:14 AM

Suggestion: Start a new trend here and stop worshiping the U3 rate and start reporting the actual numbers it’s computed on then give us a U3 rate that counts all those people who’ve dropped out of the job market and see what that rate is. This is all just a bunch of BS.

stukinIL4now on June 7, 2013 at 9:14 AM

11.4% this month (see above). That’s higher than any point between January 1994 (when the current version of “people who want a job but aren’t in the labor force” came out) and March 2009.

Steve Eggleston on June 7, 2013 at 9:18 AM

However bad the stats are, the media will treat it like a bonanza, and of course the WH will as well. People are told it’s upbeat, presto, it’s true even if it isn’t.

arand on June 7, 2013 at 9:44 AM

Forward!

Good Lt on June 7, 2013 at 9:46 AM

My fear is it has become like a joke now each month. It is fun to point out how ridiculous any talk of an improving economy is but nothing is being done to make it better. The economy is struggling at best, millions out of work, sky high gas prices, strangling regulations, and lets not forget the destruction Obamacare is about rain down on the economy.

Ellis on June 7, 2013 at 10:02 AM

ABC News

Bronars said he was concerned that the unemployment rate for adult African-American men over 20 years old jumped to 13.5 precent from an average of about 12.7 percent over the past three months.

Wigglesworth on June 7, 2013 at 10:13 AM

Surprise surprise! When I read the low predictions last week I knew they were going to come up with more “jobs” than that.

sandee on June 7, 2013 at 10:49 AM

Gosh, I remember when 5% sucked, now 7.6% is awesome. Good times.

Cindy Munford on June 7, 2013 at 10:50 AM

This is what planned economies look like. Trending towards utopia!

tom daschle concerned on June 7, 2013 at 11:00 AM

ABC News

Bronars said he was concerned that the unemployment rate for adult African-American men over 20 years old jumped to 13.5 precent from an average of about 12.7 percent over the past three months.

Wigglesworth on June 7, 2013 at 10:13 AM

Proves that regardless of how you look at it, unless you’re a geezer, the job market isn’t good.

Steve Eggleston on June 7, 2013 at 11:05 AM

Given how honest we know our government is, how hard they work to follow the US Constitution, why should any of these numbers be considered accurate? Is it outrageous to think that somewhere, in a “mancave,” two guys invent numbers by spinning a dial?

KCsecurity1976 on June 7, 2013 at 11:12 AM

So……

The number of those not in the workforce but who want a job rose, though, by almost 300,000 to roughly the same level as March;

compared to

with a growth of 175,000 jobs

Am I being stupid or does it sound like we have a deficit on the number of jobs the economy needed to create?

Oh wait….I forgot we don’t count those people anymore….they’ve been unemployed for too long.

So if unemployment among African Americans goes up like it has, is that racist? Or is it racist only if a Republican is in charge?

Every time I try to understand Lib logic I get confused….I mean they keep telling me President Awesome is doing wonders here.

goflyers on June 7, 2013 at 11:14 AM

Oh come on guys , you know under Bush they were all
hamburger flipping jobs . /s

Lucano on June 7, 2013 at 12:03 PM

employment-population ration [sic] remained at 58.6%, where it has been nearly all year

From January 3, 1995 to January 2, 2007, Republicans controlled a majority (2+ out of 3) of the House, Senate, and Presidency.

During those 12 straight years (144 consecutive months) from January 1995 – December 2006, the average monthly Employment-Population ratio during Republican majority control was 63.3%.

President Bush and the Republican majority in Congress actually ended slightly above average at 63.4% in December 2006.

From January 3, 2007 to present, Democrats have controlled a majority (2+ out of 3) of the House, Senate, and Presidency. Under Democrat majority control, the ratio plummetted and has never really recovered.

And during Obama’s pResidency, the average monthly Employment-Population Ratio has been 58.7%, and he hasn’t had a month above his average since August 2009.

The worst month under Bush was better than the best month under Obama.

ITguy on June 7, 2013 at 12:03 PM

Oh come on guys , you know under Bush they were all
hamburger flipping jobs . /s

Lucano on June 7, 2013 at 12:03 PM

Funny you should say that. The few “bright” spots last month (all seasonally adjusted):

- Motor vehicles and parts +2.4 thousand to 797 thousand
- Miscellaneous store retailers +1.5K to 813 thousand
- Real estate +4.1K to 1.44 million
- General-merchandise stores +9.7K to 3.13M
- Temporary help services +25.6K to 2.68M
- Computer systems design and related services +6K to 1.69M
- Services to buildings and dwellings +6.4K to 1.87M
- Amusements, gambling, and recreation +12.5K to 1.45M
- Food services and drinking places +38.1K to 10.26M

Steve Eggleston on June 7, 2013 at 12:37 PM

175,000 jobs created in May. April revised downward by 16,000 and no recovery of the .2 hour decline in the average work week lost in April, which by the way has the same economic impact as losing over 700,000 jobs. I know, the media said it was a decent report. What else is new.

Drilling down further, of the 175,000 jobs created, which barely keeps pace with population growth, 122,000 jobs were low wage jobs. The kind you can’t raise families on or buy houses with. Here’s that breakdown…

Leisure and Hospitality added the most jobs in May, 43K
Retail Trade jobs rose by 28K
Education and health added another 26K
Temp jobs: the lowest of all paying jobs added another 26K

And finally, the stake in the heart of this report in my view, of the 175,000 jobs created in May, 205,000 jobs, yes 205,000 jobs were created statistically through the BLS Birth/Death statistical model. These aren’t real jobs. These are jobs that the BLS thinks were created.

All in all it’s very poor report and is in line with the poor reports of the recent past.

voiceofreason on June 7, 2013 at 12:49 PM

I have a funny feeling this month’s positive jobs report will be revised down next month.

There Goes the Neighborhood on June 7, 2013 at 12:50 PM

That first item should be “motor vehicles and parts manufacturing“. I should have known better than to copy and paste from the table.

Incidentally, that is the largest gain in manufacturing, which saw a sesasonally-adjusted loss of 8,000 jobs in May.

Steve Eggleston on June 7, 2013 at 12:52 PM

voiceofreason on June 7, 2013 at 12:49 PM

Great minds, though I’ll note the average weekly private-sector earnings did tick up to $678.70 from April’s $676.36 and March’s $677.35. Of course, I didn’t see that, but….

As for the birth/death model, given the outsized growth in the CPS employment growth number (and the fact that it takes a new jobsite 6 months to even be considered for the CES), they might have come close this time.

Steve Eggleston on June 7, 2013 at 12:57 PM

That earnings growth is, on an annualized basis, 1.2% from March to May, and 2.2% between May 2012 and May 2013. Not exactly good (and I mean that in the “not exactly Hertz” kind of way).

Steve Eggleston on June 7, 2013 at 1:00 PM

And, of course, this month the usual media suspects are being VERY careful to explain that the rise in the headline percentage is due to an increase in the labor force. A fact that they were just as careful to sweep under the rug when the numbers decreased as people left the labor force.

MJBrutus on June 7, 2013 at 1:12 PM