Employers didn’t seem discouraged in May by a poor Q1 showing. Despite an apparent contraction in winter, the US economy added 280,000 jobs in May, following a slight downward revision in April to 221,000. With revisions, the BLS now shows a three-month rolling average of 207,000 jobs added per month — enough to keep up with population growth, but still barely incremental in dealing with the chronically unemployed:
Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline.
In May, both the unemployment rate (5.5 percent) and the number of unemployed persons (8.7 million) were essentially unchanged. Both measures have shown little movement since February. …
In May, the civilian labor force rose by 397,000, and the labor force participation rate was little changed at 62.9 percent. Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent. The employment-population ratio, at 59.4 percent, was essentially unchanged in May.
The workforce structure rates remained largely unchanged. U-3 rose from 5.4% to 5.5%, but that may be more of a rounding issue. The civilian workforce participation rate rose a tenth of a point to 62.9%, still almost at a 36-year low, and the employment-population ratio rise similarly to 59.4%. The broader U-6 measure of unemployment remained at 10.8%, down from January’s 11.3%. As Steve Eggleston notes, the core measures haven’t changed much since last May, except in U-3:
The U-6 measure (without seasonal adjustments) was 10.4%, same as April, but down from 11.7% in May 2014.
Not all of the numbers were positive. Unemployment for African-Americans jumped 0.6%, and the unemployed overall tend to be unemployed longer. Those unemployed less than five weeks dropped 311,000, but those unemployed between 5 and 26 weeks — the length of unemployment benefits now — rose 379,000. Still, those not in the workforce declined by 208,000 and the workforce itself increased by 397,000.
Almost all of the gain in employment came in the service sector; only 6,000 jobs were added to the manufacturing sector overall. The big gains came in financial services, health care, and the hospitality industries, while the only big loss came in mining (-18,000).
Overall, the jobs report is fairly positive, but the manufacturing sector looks very shaky. Wage growth improved a little, but it’s only at 2.3% for the year, and that doesn’t bode well for consumer activity, which has already dropped this year. There will be plenty of stories about beating expectations, but that doesn’t mean the same thing as great.
The Associated Press called it “robust,” which is overselling it just a bit:
U.S. employers added a robust 280,000 jobs in May, showing that the economy is back on track after starting 2015 in a slump.
The Labor Department said Friday that the unemployment rate ticked up to 5.5 percent from 5.4 percent in April. But that occurred for a good reason: Hundreds of thousands more people sought jobs in May, and not all found them. …
Still, average hourly wages rose only 2.3 percent from a year earlier. Tepid pay gains has been a persistent problem for the economy.
Over the past three months, the economy has added an average of 207,000 jobs, a decent gain though lower than last year’s average of 263,667.
Exactly. We’re not experiencing a robust anything yet, and haven’t in six years of recovery. When the participation rate gets back into the 64-65% territory and we’re adding 350,000 jobs a month on a consistent basis, we can start talking about robust.
Update: I mistakenly put the U-3 rate in for the emp-pop ratio, which is what happens when you work with numbers without sufficient caffeine. Thanks to Steve Eggleston for pointing out my error.