May Job Growth Was Slowest in More Than 5 Years
Government and most other sectors of the economy aren't adding many jobs.
The Labor Department issued a particularly disappointing jobs report on Friday, raising concerns of a slowdown in the economy.
Only 38,000 jobs were added in May, the lowest monthly gain in more than five years. About 35,000 striking Verizon workers, who weren’t included in the count, contributed to the weak estimates. But even without the strike, job growth still would have fallen far short of analysts’ expectations of roughly over 150,000 positions for the month.
Along with the disappointing indicators for May, prior estimates for March and April were revised down by a combined 59,000 jobs. National job gains have now declined for three consecutive months. While growth generally tends to slow as the labor market tightens, the latest job gains aren’t enough to keep pace with population increases.
Labor force participation, which considers those working or looking for work, also dipped 0.2 percentage points after climbing over the first few months of the year. Long-term unemployed workers ceasing their job searches contributed to part of the decline. Americans dropping out of the labor force helped to push the unemployment rate down to 4.7 percent.
Another disappointing indicator, those working part time for economic reasons, jumped by 468,000. About 6.4 million Americans are now considered involuntary part-time workers, mirroring levels as of late last summer.
Taken together, the report makes it highly unlikely that the Federal Reserve will raise interest rates when it meets later this month.
Local government employment rose by 8,000 in May, but that’s only because prior estimates were revised down. The Labor Department lowered its updated public sector job estimates by 9,000 for March and 11,000 for April. Excluding education jobs, local government employment has expanded by an estimated 78,000 jobs over the past 12 months, an increase of about 1 percent. Meanwhile, education employment hasn’t moved much -- down by 11,000 nationally over the year.
State government employment continues to remain flat, falling by 7,000 positions last month.
In the private sector, the construction (-15,000), manufacturing (-10,000) and wholesale trade (-10,000) industries all shed jobs last month. Mining and logging continued to contract as it has followed a steady downward trend since late 2014. The leisure and hospitality industry, along with professional and business services, saw relatively tepid gains for the month.
Health care was the only larger sector of the economy that recorded strong growth, adding an estimated 46,000 jobs. The sector has expanded by nearly half a million jobs over the past 12 months.