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| Construction workers at a housing site in East Boston. Copyright EastBoston.com |
OVERVIEW
- Total non-farm payroll employment increased by 75,000 and the unemployment rate remained at 3.6 percent, according to the Bureau of Labor Statistics.
- The Labor Force Participation (LFP) rate remained at 62.8 percent the same rate from one year ago. The Employment-Population ratio also remained at 60.6 percent.
- Professional and Business Services (+33,000) and Health Care (+16,000) led all sectors in May. Construction added 4,000 jobs.
- Employment in other industries did not change from April to May. Mining, Manufacturing, Wholesale Trade, Retail Trade, Transportation and Warehousing, Information, Financial Activities, Leisure and Hospitality and Government were all unchanged.
- Average hourly earnings rose by 6 cents to $27.83. In May, the average workweek for all employees remained at 34.4 hours down from the May 2018 reading of 34.5. Since May 2018 wages are up 3.1 percent. (See Figure 1.)
- The number of persons employed part-time declined by 299,000 in May to 4.4 million. The number of long-termed unemployed (greater than 27 weeks) remained unchanged at 1.3 million and continued to account for 22.4 percent of all unemployed.
- In May 1.4 million persons were not in the workforce but wanted and were available for work and sought employment in the last year. This group known as “workers marginally attached to the labor force” was unchanged since last year. BLS reports that 1.1 million of this group had not searched for work “for reasons such as school attendance or family responsibilities.”
ANALYSIS
Lagging much below the three-month average of 151,000 jobs, today’s payrolls report of 75,000 new jobs is a disappointment. Both standard measures of private sector job growth, the BLS survey and the ADP National Employment Report captured the trend downward lackluster job creation for May. The BLS reported 90,000 private jobs while ADP on Wednesday reported 27,000 jobs.
While the BLS reported little or no changes for the mining and manufacturing sectors, the ADP found losses in both. The ADP report (-36,000) varied from the BLS (+4,000) on the construction sector.
As for the total Non-farm labor report, Wall Street expected of 175,000 new jobs. Revisions were also on the downside. March was revised down from 189,000 to 153,000 and April was revised down from 263,000 to 224,000 accounting for 75,000 less jobs than initially reported. The revision brought down the three-month average to 151,000 per month.
What caused the job creation slowdown? Observers rest their arguments on the trade/tariff uncertainty dominating the news cycle. “It definitely looks like we’ve downshifted in the pace of job growth,” Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. told Bloomberg. “Overall it’s a disheartening report particularly since you may have some trade effects there, but a lot of the trade tensions escalated” since the reference period for the Labor Department’s surveys in the middle of the month.” Today’s report lends a dose of pessimism to the generally positive economic record of the last few years. Mike Fratantoni, chief economist for the Mortgage Bankers Association, told Yahoo Finance. “The job market remains tight, but this report, coupled with other recent data, shows a distinct cooling of the economy this spring.”
