Despite the 1% GDP contraction in the first quarter hiring was steady if somewhat flat in May and heavy on the McJobs, according to the new BLS jobs report for May, but the economy is still down 7 million jobs.
Some pundits are crowing about the report, but even a little digging into the data without bringing an agenda to the table shows fundamental weakness in the job market.
Private employers created 217,000 jobs in May, just edging above the level needed to keep up with population growth but not enough to have impact on the high level of chronically unemployed.
Most of the job gains came on lower-paying industries as wages rose modestly, increasing 5 cents an hour to maintain the modest 2.1% growth over the past 12 months. Hospitality—primarily bars and restaurants—grew by 32,000. Manufacturing and construction, by contrast, were about flat.
Also, while the labor force participation rate was unchanged in May, it’s at the lowest level since the depths of the Carter Administration malaise in March 1978.
Notably, the monthly survey found that after six years and trillions of dollars in “stimulus” spending, the total number of employed people in the United States stands at 138.46 million, which where the number stood in January 2008.
January 2008 is just before massive rounds of corporate layoffs swept the economy, leading the unemployment rate to skyrocket to 10%.
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At the current rate of growth – 217,000 jobs per month, of which 150,000 are needed to maintain replacement levels – it would take another eight years and nine months to make up those 7 million lost jobs.
Also concerning, as others have noted, since December 2007, the total number of jobs is virtually unchanged, while the number of people not in the labor force has increased by an unprecedented 12.8 million from 79.2 million to a record 92 million.
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The unemployment rate was unchanged at 6.3%, the U.S. Bureau of Labor Statistics reported Friday.
The May jobs report was weak on construction jobs and on young adult employment, said Jed Kolko, chief economist for Trulia (TRLA).
“For housing, the bright spot was that overall job growth is strong in metros that were clobbered in the housing bust,” he said.
Residential construction employment, including residential specialty trade contractors, increased by only 3,300 in May versus one month earlier, and by 24,200 thousand versus three months earlier, Kolko said
The unemployment rate held at 6.3% in May, following a decline of 0.4 percentage point in April. The number of unemployed persons was unchanged in May at 9.8 million.
The civilian labor force participation rate was unchanged in May, at 62.8%. The participation rate has shown no clear trend since this past October but is down by 0.6 percentage point over the year.
Over the year, the unemployment rate and the number of unemployed persons declined by 1.2 percentage points and 1.9 million, respectively.
Among the major worker groups, the unemployment rates for adult men (5.9%), adult women (5.7%), teenagers (19.2%), whites (5.4%), blacks (11.5%), and Hispanics (7.7%) showed little or no change in May. The jobless rate for Asians was 5.3% (not seasonally adjusted), little changed from a year earlier.
Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 218,000 in May. The number of unemployed reentrants increased by 237,000 over the month, partially offsetting a large decrease in April. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their current job search.)
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.4 million in May. These individuals accounted for 34.6% of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 979,000