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.
RT @jamiedupree: Job gains were revised up in March from 138k to 142k, April was revised down from 165k to 149k
— Zeke Miller (@ZekeJMiller) June 7, 2013
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.”