Job Gains Fall Below 100,000 in May
The U.S. economy added only 75,000 jobs in May, according to the Bureau of Labor Statistics, falling well below most economists’ expectations.
While these gains were lower than expected, they did continue the streak of positive monthly gains, now at 104 consecutive months. The average gain so far in 2019 is about 164,000 jobs monthly.
Meanwhile, unemployment continued at a five-decade low as the rate remained at 3.6% in May.
Average hourly earnings growth for all employees topped 3% for the 10th consecutive month in May, coming in at 3.1%, slightly below the 12-month average of 3.2%. The monthly gain between April and May was 0.2%, increasing 6 cents. Annually, wages increased 84 cents, to $27.83.
More than 2.3 million jobs were added in the 12 months ending in May 2019 compared to about 2.4 million for the same period ending May 2018. This annual growth expanded the job base by 1.6%, slightly below the average annual growth rate for the preceding 12 months (1.7%). Revisions to the previous two months’ numbers resulted in 75,000 fewer jobs than initially reported, as March’s job gain figure was revised from 189,000 jobs to 153,000 jobs, and April’s gains were revised from 263,000 to 224,000.
The civilian labor force participation rate held steady at 62.8% from last month and was also unchanged from last year. The employment-population ratio of 60.6% was the same for the third consecutive month, but up 20 basis points (bps) from May 2018. The total number of unemployed (5.9 million) is down about 240,000 for the year and is the second straight month below 6.0 million unemployed.
The number of job leavers – workers who quit or voluntarily leave their previous job and immediately begin looking for new employment – increased to 803,000 in May. That number was up 66,000 from April, but down 41,000 from May 2018. The number of part-time workers for economic reasons (4.36 million in May) fell by 565,000 from May 2018, but the number of part-time workers for non-economic reasons increased by 234,000 to 21 million, as more workers were able to find jobs that suit them. The U6 unemployment rate, which includes part-timers for economic reasons and marginally attached workers, fell to 7.1%, down from 7.7% in May 2018 and its lowest level since November 2000.
The number of long-term unemployed workers – those out of work for 27 weeks or more – ran at 1.3 million in May, up 101,000 from 12 months earlier. The average duration of unemployment inched up to 24.1 weeks as some softness creeps into the economy. The number of multiple jobholders increased by 446,000 year-over-year, to 7.9 million. Meanwhile, the number of discouraged workers not in the workforce (338,000) decreased by 40,000 from one year ago.
Seasonally adjusted industry job gains for May occurred in essentially three industries: Professional and Business Services (+33,000), Education and Health Services (+27,000) and Leisure and Hospitality (+26,000). All other industries had moderate gains or losses, with the exception of Government (-15,000).
• The Professional and Business Services industry gains in May were in both the lower-paying administrative and waste services (+14,800) and the higher-paying professional and technical services (+21,300) sectors. Employment services (+7,900) and computer systems design (+8,400) were the best performing subsectors for each.
• By far, the health care and social assistance sector (+24,000) led monthly gains for the Education and Health Services industry’s job gains in May. Health care’s gain of 15,700 jobs was primarily in ambulatory health care services (+12,200) while individual and family services (+7,000) boosted the social assistance subsector’s gains. Education services added only 3,600 jobs for the month.
• As is typically the case, food services and drinking places (+16,900) accounted for the largest share of the Leisure and Hospitality industry’s monthly gain, although the accommodation (+5,200) and performing arts and spectator sports (+7,000) subsectors added to the monthly total.
• The Construction industries gain of only 4,000 jobs in May were a result of solid gains in the specialty trade contractors sector (+12,900) offset by losses in the heavy and civil engineering construction sector (-9,400).
• The Manufacturing industry gained 3,000 jobs in May as durable goods manufacturing (+4,000) returned, particularly transportation equipment (+4,000). Nondurable goods manufacturing lost 1,000 jobs for the month as food, apparel, and textiles were down.
• The Financial Activities industry’s net gain of 2,000 jobs came primarily from the real estate and rental and leasing sector (+5,300) cancelling losses in finance and insurance (-2,500).
• The Mining and Logging industry (+1,000) had more jobs gained in coal mining (+500) and logging (+400) than in any other subsector.
• The Trade, Transportation and Utilities supersector was a net zero gain in May as wholesale trade gains (+7,100) were wiped out by steep losses in retail trade (-7,600). Turbulence in the brick-and-mortar retail industry is still rippling through the economy with a 12,700 job loss in clothing and clothing accessories stores, although general merchandise stores added 6,200 jobs in May.
• The Other Services sector had a loss of 1,000 jobs in May with repair and maintenance (-2,900) dragging down modest gains in personal and laundry services and membership associations.
• The Information industry (-5,000) lost jobs in the other information services sector (-2,600), telecommunications (-1,700), and the motion picture and sound recording industry (-1,800).
• The Government sector’s 15,000 job loss for May was spread between local (-9,000) and state (-10,000), as Federal employment increased by 4,000 for the month.