The Bureau of Labor Statistics reported an addition of 75,000 jobs in May — a significant drop from economists’ estimates of 185,000. Unemployment remained steady at 3.6 percent, continuing a record low pace that has not been seen for nearly 50 years. The labor force participation rate remained unchanged from April to May at 62.8 percent.
The change in total nonfarm payroll employment for March was revised down from 189,000 to 153,000, and the change for April was revised down from 263,000 to 224,000. With the revisions, employment gains in March and April became a combined 75,000 less than expected. So far, job gains averaged 164,000 for the year 2019, compared with an average gain of 223,000 per month in 2018.
Professional and business services experienced the largest increase among industries, adding over 31,000 jobs, followed by education and health services which added 27,000 jobs to the economy. Jobs in leisure and hospitality, and construction industries produced 26,000 and 4,000 jobs, respectively. Manufacturing, other services and government lost 21,000 jobs combined with the majority coming from the government sector (15,000 jobs).
In May, the average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $27.83, while weekly earnings increased by $2.06, from $955.29 in April to $957.35 in May. Over the year, the average hourly earnings have increased by 3.1 percent.
The number of people unemployed less than 5 weeks increased by 243,000 to 2.1 million, following a decline in April. The number of long-term unemployed, or those out of work for more than 27 weeks changed little over the month and accounted for 22.4 percent of the unemployed.
When separated by groups, the black unemployment rate showed the biggest decrease moving from 6.7 percent in April to 6.2 percent in May, while Asians saw their unemployment rate increase the most of all ethnic groups, 0.3 percentage points, from 2.2 in April to 2.5 in May.
ThinkWhy™ It Matters: The 75,000-job additions for the month of May, although below expectation, is still reasonable as monthly trend tends to be very volatile. The good news, as pointed out by Wall Street, is if the economy continues to cool down a bit, the Federal Reserve may pause on raising interest rates. As revisions come in, analysts at ThinkWhy anticipate May’s job numbers to be revised upward slightly because seasonal summer jobs held by college students may not have registered in the May report. As evidenced by available job openings, most who are looking for jobs have found employment with a slightly higher wage level allowing most to grab a cold glass of lemonade and enjoy a bright start to the summer!