ADP Research Institute on Wednesday released its estimate of private-sector job growth for May and dropped a few jaws. Not only did the news of just 27,000 new jobs being created for the month send gold prices soaring 1%, but it also sparked a Wall Street Journal story about how ADP gets no respect because it so often misses the jobs estimate put together each month by the Bureau of Labor Statistics.
Sure enough, the BLS announced Friday morning that the economy had generated 90,000 seasonally adjusted non-farm jobs in the private sector in May, but shed 15,000 jobs in the public sector, for a net gain of 75,000.
While that was nearly three times what ADP had estimated, it was 100,000 fewer jobs than the consensus of experts surveyed earlier in the week. Moreover, the previous estimate for job gains in April was revised from 263,000 to 224,000, and in March from 189,000 to 153,000. That lowered the gains for those two months by 75,000. The bureau includes as employed anyone who has worked even a single hour during the survey period, which takes place around the 12th of each month.
May marked the 104th consecutive month of job expansion.
The headline rate of unemployment that the BLS calls U3 held steady at 3.6% in May, which remains the lowest it’s been in nearly 50 years. That is below what economists have long set as the full employment level. But full employment is not what some experts see.
For instance, Katharine Abraham and John Haltiwanger, who teach economics at the University of Maryland, said that the usual measures we depend on for judging the health of the job market are overstating the case for full employment.
While they may have jobs and have partially or completely recovered from the financial damage done to them during the Great Recession, many Americans are nonetheless nervous about the course of the economy:
Recent polls suggest a substantial majority of Americans feel the economy is working only for “those in power.”
A big reason for this disconnect is that many Americans feel insecure. They may be doing well at the moment, but they fear that, however high they are on the economic ladder, a single bad step or bad event could cause them to slip. A booming economy hasn’t quieted these concerns, because insecurity remains a huge and growing problem in ways that voters and candidates instinctively get but the sunny job numbers largely hide.
There is also the fact that average wages have risen at an excruciatingly slow pace that has only picked up recently, though sporadically. The pain of that has only been eased somewhat by a relatively low rate of overall inflation. May to May, wages have increased the past year by 3.1% against the current inflation rate of 2%.
The BLS calculates job gains in other cohorts each month, including one it labels U6 that counts unemployment as well as underemployment. In May U6 fell 0.2 to 7.1%.
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Other statistics from the May report:
The civilian workforce rose by 176,000 in May, after falling by 490,000 in April and 224,000 in March.
The labor force participation rate remained steady at 62.8% in May. The employment-population ratio held at 60.6%.
Unemployment rates differ by race and sex. (May percentages in bold; April percentages in [brackets and italics].) Adult men: 3.3% [3.4%]; Adult women: 3.2% [3.1%]; Whites: 3.3% [3.1%] ; Blacks: 6.2% [6.7%]; Asians: 2.5% [2.2%]; Hispanics: 4.2% [4.2%]; American Indians: Not counted monthly.
• Average hourly earnings of private-sector production and nonsupervisory employees rose in May by 7 cents an hour to $23.38.
• Average hourly earnings for all employees on private non-farm payrolls in May rose 6 cents an hour to $27.83.
• Average work week for all employees on non-farm payroll was unchanged at 34.4 hours in May.
• The manufacturing work week in May was unchanged at 40.6 hours.
May Job Gains and Losses for selected categories:
Professional services:
- Temporary help services: 5,100
- Transportation & warehousing: -200
- Financial activities: 2,000
- Leisure & hospitality: 26,000
- Information: -5,000
- Professional and business services: 33,000
- Education and health services: 27,000
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- Health care & social assistance: 24,000
- Retail trade: -7,600 [after shedding 12,000 in April and 11,700 in March]
- Construction: 4,000
- Manufacturing: 3,000
- Mining and Logging: 1,000
Here's what the seasonally adjusted job growth numbers have looked like in the previous decade compared with this May’s gain of 75,000 jobs.
May 2009: -344,000
May 2010: 534,000 (heavy on temporary Census hiring)
May 2011: 95,000
May 2012: 99,000
May 2013: 224,000
May 2014: 221,000
May 2015: 319,000
May 2016: 15,000
May 2017: 128,000
May 2018: 270,000
The BLS bases its monthly count on the Current Employment Survey of 147,000 business establishments. It derives the unemployment rate from another study, the Current Population Survey of 60,000 households. The final day of the surveys falls around the 12th of each month, which means this month’s jobs data actually measure jobs gained in the first part of April and the last part of March.