May Jobs Report: 138000 More On Payrolls; Unemployment Dips Slightly

The Bureau of Labor Statistics reported today that the unemployment rate dropped from 4.4 percent to 4.3 percent, with 138,000 new jobs created last month, while the labor force participation rate declined from 62.9 percent in April to 62.7 percent in May.

The unemployment rate ticked down a tenth of a percentage point to 4.3 percent, the lowest since 2001, but that was largely because 429,000 people dropped out of the labor force. As I explained in yesterday's ADP report analysis, we need about 121,000 jobs added a month just to keep up with population growth at last year's level of expansion and current employment-population ratios.

As per the Labor Department, The payrolls of nonfarm have been increased to 138,000 last month due to government, manufacturing, and retail sectors lost their jobs. This is, however, down from the average monthly gain over the past twelve months of around 46,000 jobs per month (though the YTD average for 2017 remains in line with that number). Food services added 30,300 workers, health care 24,300. The monthly jobs numbers can be volatile - and they are always revised. Since February, the first jobs report with President Trump in office for the whole month, the USA has gained 594,000 jobs. Hospitals hired an additional 7,400 workers last month.

"We're not anxious about slowing job growth", Gary Cohn, director of the White House's National Economic Council, told CNBC. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent.

Duncan said the unemployment rate dropped to the lowest it has been in 16 years.

The economy grew at a 1.2 percent annualised rate in the first quarter.

Wage growth was little changed, and economists had expected this because of a calendar quirk: The survey week for the jobs report usually includes the 12th of the month.

Coal mines added 400 jobs in May. At the same time, labor force participation is also dropping, now at 62.7 percent for May. Data on consumer spending and manufacturing have offered hope that growth picked up early in the second quarter after gross domestic product increased at a tepid 1.2 per cent annualised rate at the start of the year.

"The unemployment rate fell for all the wrong reasons", said Elise Gould, a senior economist at the Economic Policy Institute.

Also discouraging is that job gains for March and April were revised down by 66,000. A report by the Commonwealth Fund found that repealing key provisions of the ACA, particularly the insurance premium tax credits and Medicaid expansion, could cause the sector to lose 2.9 million jobs by 2019.

"The loss of manufacturing jobs in May is a stark reminder of the challenges that face factory workers: declining auto sales, a persistently high goods trade deficit, and muddled fiscal policies", said AAM President Scott Paul.

Worse yet the quality of the jobs being created is abysmal, as part-time positions increased by 133,000 and full-time jobs fell by 367,000.

A fourth report by global outplacement consultancy Challenger, Gray & Christmas showed layoffs announced by US -based employers surged 41 percent to 51,692 in May.

  • Zachary Reyes