The Bureau of Labor Statistics
reported Friday that the economy created 262,000 seasonally adjusted private new non-farm jobs in April. Government added 18,000 new jobs. The total of 280,000 was far above the 220,000 consensus of experts surveyed earlier in the week.
The bureau revised March's previous tally of new jobs from 85,000 to 119,000 and April's from 223,000 to 221,000. That puts the monthly average for the past seven months at 259,000.
The unemployment rate, labeled U3 by the BLS, rose to 5.5 percent. That was due to the significant rise in the size of the civilian workforce, a sign that people who had given up looking for jobs are viewing the labor market more optimistically now. Seen in that light, the rise in the rate is actually a positive sign. The bureau also measures both unemployment and underemployment, labeled U6, which includes people with no job at all, part-time workers who want full-time jobs but can't find one, and many "discouraged" workers. That remained unchanged at 10.8 percent.
Wages grew at their fastest rate in six years.
The civilian workforce rose by 397,000, after having risen 166,000 April. The employment-population ratio rose to 59.4 percent. Labor force participation rose to 62.9 percent.
The bureau counted 8.7 million people out of work in May. But that does not include Americans who have left the workforce and still want a job but have given up searching for one. The Economic Policy Institute puts that additional number of sidelined workers at about 3 million.
The continuing increase in new jobs is something worth cheering about. But even though we've seen 12.8 million new jobs under the Obama administration, despite a horrible first year, unemployment is still higher than it was before the Great Recession began in December 2007. Moreover, in 36 states joblessness remains higher than before the recession.
Economic growth, which has been ongoing for all but three quarters since June 2009, still isn't strong enough to give new college graduates the best of job prospects. And when they are hired, the average pay in those jobs is less than it was 15 years ago. Many grads aren't getting jobs.
During the past year, college graduates in the 21-24 age range faced a jobless rate of 7.2 percent. That compares with 5.5 percent in 2007. Their underemployment rate—meaning those without full-time hours—is 14.9 percent compared with 9.6 percent eight years ago. For high school graduates, the situation is much worse. Those 17- to 21-year-olds are afflicted by a jobless rate of 19.5 percent compared with 15.9 percent in 2007, and their underemployment rate is a stunning 37 percent, compared to 26.8 percent in 2007.
You can read more about the situation for young graduates here.
For more details about today's jobs report, please continue reading below the fold.
Key aspects of the report:
The BLS makes special note of the job situation of Americans in their prime working years—those aged 25-54. From this we get a better picture of how well the job market is really doing because the measurement excludes workers in their late teens and early 20s when they are more likely to be in school or traveling or exploring their identity and often don't hold down a full-time job or only do so sporadically out of choice. It also excludes people 55 and older, many of whom are in the process of retiring or have freely chosen to work fewer hours. The 25-54 employment rate reached a peak of 81.9 percent in April 2000. The month the Great Recession began, in December 2007, the figure was 79.7 percent. It reached a low point of 74.8 percent in November 2010. On a slow rise ever since, it was unchanged in May at 77.2 percent for the third consecutive month.
The BLS warns that its "monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 90,000." That means the "real" number of new jobs created in April wasn't 223,000 but somewhere in a range between 133,000 and 313,000.
Hours & Wages
• Average hourly earnings of private-sector production and nonsupervisory employees rose 6 cents to $20.97 in May
• Average work week for all employees on non-farm payrolls remained unchanged at 34.5.
•Average hourly earnings for all employees on private non-farm payrolls rose/fell 8 cents to $24.96.
• The manufacturing workweek was unchanged at 40.7 hours.
• The average workweek for production and nonsupervisory employees on private non-farm payrolls was unchanged at 33.7 hours.
EMPLOYMENT-POPULATION
Among other news in the May job report:
Demographic breakdown of official (U3) seasonally adjusted jobless rate:
• African American: 10.2 percent, up from 9.6 percent in April
• Latino: 6.7 percent, down from 6.9 percent in April
• Asian (not seasonally adjusted): 4.1 percent down from 4.4 percent in April
• American Indian (data not collected on monthly basis)
• White: unchanged from 4.7 percent in April
• Adult women (20 and older): 5.0 percent, up from 4.9 percent in April
• Adult Men (20 and older): unchanged at 5.0 percent
• Teenagers (16-19): 17.9 percent, up from 17.1 percent in April
Duration of unemployment:
• Less than five weeks: 2.418 million, down from 2.729 million in April
• 5 to 14 weeks: 2.532 million up from 2,307 million in April
• 15 to 26 weeks: 1.293 million, up from 1.139 million in April
• 27 weeks and more: 2.502 million, down from 2.525 million in April
Job gains and losses in selected categories:
• Professional services: + 63,000
• Transportation & warehousing : + 13,100
• Leisure & hospitality: + 57,000
• Information: - 3,000
• Health care & social assistance: + 57,700
• Retail trade: + 31,400
• Construction: + 17,000
• Manufacturing: + 7,000
Here's what the seasonally adjusted job growth numbers have looked like in May for the previous 10 years.
May 2005: + 176,000
May 2006: + 24,000
May 2007: + 145,000
May 2008: - 183,000
May 2009: - 355,000
May 2010: + 518,000 (Affected by Census hiring)
May 2011: + 103,000
May 2012: + 113,000
May 2013: + 219,000
May 2014: + 236,000
May 2015: + 280,000
••• •••
The BLS jobs report is the product of a pair of surveys, one of more than 410,000 business establishments called Current Employment Statistics, and one called the Current Population Survey, which questions 60,000 householders each month. Here is the BLS's explanation of its methodology. The establishment survey determines how many new jobs were added. It is always calculated on a seasonally adjusted basis determined by a frequently tweaked formula. The BLS report only provides a snapshot of what's happening at a single point in time.
It's important to understand that the jobs-created-last-month-numbers that it reports are not "real." Not because of a conspiracy, but because statisticians apply formulas to the raw data, estimate the number of jobs created by the "birth" and "death" of businesses, and use other filters to fine-tune the numbers. And, always good to remember, in the fine print, they tell us, with a 90 percent confidence level, that the actual number of newly created jobs reported each falls within a plus or minus 90,000 range.