The Bureau of Labor Statistics (BLS) released the official jobs report for May Friday and it showed that 175,000 jobs were added in May. This is slightly higher than the 167,000 that economists expected. Over the last twelve months the economy has added an average of 172,000 jobs per month.
The unemployment rate ticked up a tenth of a percent to 7.6% and this is due to the fact that more people decided to enter the job market. They had been sitting on the sidelines but now feel there is hope of getting a job. The BLS, however, characterizes these numbers as essentially unchanged.
There were 178,000 private sector jobs added, but these were offset by a drop in public sector jobs In May 14,000 federal government workers lost their jobs due to budget cuts. This is significantly higher than previous months. Some of these, 3,800, were layoffs by the U.S. Postal Service, however the majority, 9,400 were federal employees who lost their jobs due to the sequester.
On Wednesday ADP reported that 135,000 private sector jobs were added–less than the 178,000 in this report. Next month ADP and the BLS will revise this months estimates so we will see if they move closer together.
State governments also had a net loss of 2,000 jobs, but local governments were on a hiring spree adding 13,000 jobs. Of those, 7,400 were in education. Since the beginning of the recession over 600,000 government workers have lost their jobs. This is dragging the unemployment rate down. In previous recessions, government employment increased.
As is always the case, the BLS revises previous estimates when hard data comes in. They revised the March estimate up 4,000 from the 138,000 reported at the time to 142,000. However it revises April down by 16,000 from 165,000 to 149,000. With these revisions, employment gains in March and April combined were 12,000 less than previously reported.
Looking at jobs by industry the report showed that professional and business services sowed the biggest gains adding 57,000 jobs in May. Within this industry, employment continued to trend up in temporary help services adding 26,000 positions. Computer systems design and related services were up by 6,000, and architectural and engineering services hired an additional 5,000 employees. Employment in professional and business services has grown by 589,000 over the past year.
Leisure and hospitality, employment in food services and drinking places continued to expand, increasing by 38,000 in May and by 337,000 over the past year. Retail trade employment increased by 28,000 in May. The industry added an average of 20,000 jobs per month over the prior 12 months. In May, general merchandise stores continued to add jobs hiring 10,000.
Health care employment continued to trend up in May gaining 11,000 jobs. Home health care services and outpatient care centers were up by 11,000 which more than offset a loss of 6,000 by hospitals. Over the prior 12 months, job growth in health care averaged 24,000 per month despite claims that Obamacare would kill private healthcare jobs.
Employment in other major industries, including mining and logging, construction, manufacturing, wholesale trade, transportation and warehousing, and financial activities, showed little or no change over the month.
Overall this shows a steady recovery from the recession. The rate if job growth is more than required to keep pace with population growth, but it is still too slow to get the unemployment rate down to below 6%. The other thing to consider is that many gains are in lower wage industries. This also hurts the overall economy because that means there is less money available for consumers to spend.
Nevertheless, economists expected a summer slowdown like previous years, but it didn’t begin this month. Perhaps we will keep on moving forward.
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