This morning’s report from the U.S. Department of Labor also adjusted downward by 39,000 the previously reported employment numbers for March and April.
Economists had been expecting much more robust growth and a decline in the unemployment rate. A Dow Jones Newswires survey predicted the government’s report would show a jobs increase of 160,000 and a decline in unemployment to 8.9 percent. However, after being shocked Wednesday when ADP’s monthly private sector jobs report put the increase at 38,000, many economists lowered their predictions, some to 75,000.
The government’s report also showed an increase of 361,000 in the number of long-term unemployed (those out of work for more than 26 weeks). According to the report from the Labor Department’s Bureau of Labor Statistics, there are 6.2 million long-term unemployed in the U.S. And that number is actually low, since the government only counts people actively looking for work as unemployed. There are 2.2 million so-called marginally attached workers — those who didn’t look for work during the government’s survey period, but wanted work.
In addition, the government counted another 8.5 million people working part-time because they can’t find other work, but want full-time jobs. Add to those numbers the 13.9 million counted as unemployed and the toll comes to almost 25 unemployed and underemployed workers.
If there is good news to be found in the report it’s that the private sector created 83,000 jobs in May. (That growth was offset by a 29,000 decline in government jobs.)
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More than half the gains came in professional services and in healthcare, sectors that have been growing more or less steadily even through the recession. Healthcare alone grew by 27,000. Accounting and bookkeeping added another 17,000 positions.
Tempering those increases was a slight decline in temporary help and a stall in the length of the workweek. Both of those are considered early indicators of economic strength. Before employers add full-time positions, they extend hours for existing workers and bring on temps. In May, the government reported that the number of temp workers declined by 1,200 and the average workweek remained at 34.4 hours.
As disappointing as this morning’s jobs report is, when considered with other reports on housing prices, manufacturing, and consumer prices, it’s a clear indicator of the fragility of the national recovery.
“These are pretty bleak numbers,” Julia Coronado, chief economist for North American at BNP Paribas in New York, told Bloomberg News, “Some of the engines of hiring just went away. Combined with the slowdown in consumer spending, it raises concern that the slowing in hiring could be with us for a while.”