May Data Show Continued Moderate Improvement in US Labor Market
The US labor market continued its gradual improvement in May. The economy added 175,000 new payroll jobs, somewhat more than in March and April, as shown in the following chart. Payroll job growth was strongest in service sectors, with retail trade, professional and business services, and leisure and hospitality all showing strong growth. Construction added 7,000 jobs but those were offset by a decrease in manufacturing jobs, so that there was no net job growth in the goods-producing sectors. The addition of 13,000 local government jobs helped to offset continued job cuts at the federal and state levels.
The household survey, which includes self-employed persons and farm workers, showed an increase of 319,000 jobs. Some 420,000 new workers entered or re-entered the labor force, bringing the employment-population ratio up slightly. Since the labor force increased by more than the number of employed workers, the number of unemployed also increased. The unemployment rate, which is the ratio of unemployed workers to the labor force, rose fractionally from 7.513 percent to 7.553 percent. That will be enough for news headlines, which usually show the unemployment rate rounded to the nearest tenth of a percent, to report an increase from 7.5 to 7.6 percent.
The BLS also provides a broader measure of labor-market stress, U-6, which includes involuntary part-time workers and discouraged workers as well as the officially unemployed. As the next chart shows, a decrease in the number of discouraged workers and involuntary part-time workers brought that indicator down to 13.8 percent of the labor force, equal to its lowest point for the expansion.
One of the most troublesome features of the labor market during the recession and recovery has been a very high rate of long-term unemployment. As the next chart shows, the number of workers unemployed for 27 weeks or more decreased in May to its lowest level for the recovery, although it remains elevated by historical standards. The median duration of unemployment fell, although the mean duration increased slightly due to a sharp reduction in the percentage of unemployed workers falling into the 5 to 14 week bracket.
Overall, today’s report on the employment situation contains more good news than bad. It is broadly consistent with other indicators that suggest that the U.S. economy is continuing its gradual but steady recovery during the second quarter, despite continuing weakness in Europe and emerging markets.
2 Responses to “May Data Show Continued Moderate Improvement in US Labor Market”
Good article. It will be interesting to see what economists like Jan Hatzius of Goldman Sachs work out for the Sequestration Drag Effect percentage wise.
very frustrating actually given all that's been thrown at this thing. i do agree…it's not the Great Depression. in some ways however…it's worse.