May Employment Report – Unemployment Rate 9.7 percent, 20K Jobs Ex-census

may-employment-report-unemployment-rate-9-7-percent-20k-jobs-ex-census
Total non farm payroll employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010, the U.S. Bureau of Labor Statistics reported today. The unemployment rate edged down to 9.7 percent, according to the BLS report.

There was improvement in the unemployment rate, which fell to 9.7 percent from 9.9 percent; small consolation when economists were predicting job growth of over half a million, with at least 100,000 from the private sector.

Furthering tempering the jobs numbers was a revision to the March number, decreasing the initial 230,000 estimate to 208,000. April’s increase of 290,000 jobs added was unchanged. Drop in the unemployment rate will all be taken back by August when the census workers are let go.

Construction was the big loser, down 35,000 jobs. However, manufacturing added 29,000 jobs for the month, the fifth month in a row of gains. Temp help services was also a big gainer, adding 31,000. The sector is considered a bell cow of recovery on the belief that before employers add full-time workers, they bring in temp help. Since September, the sector has added 362,000 jobs.

Another sign is the continuing growth in the hourly work week. The report said the average week grew to 34.2 hours, up by .1 hour. For manufacturing employees, the workweek increased by .3 hours to an average of 40.5.
The labor force shrank again, from 65.2% of the population down to 65%. So the modestly good news from last month is gone.

MSM pundits who were saying last month “the unemployment rate went up, but that’s good news because more people came back to the labor market.” I doubt that they’ll be pointing out that this month the unemployment rate went down, but that that’s bad news because more people left the labor market.

The top in the unemployment rate is in and expect it may rise substantially June through August, and keep rising at a modest pace thereafter for most of the rest of the year. Time will tell.