May jobs report: same old, same old

- by New Deal democrat

HEADLINES:

• Not in Labor Force, but Want a Job Now: up +292,000 to 6.438 million
• Employment/population ratio ages 25-54: 76.4% down -0.1%
• Average Weekly Earnings for Production and Nonsupervisory Personnel: $20.54 up $.03

In May 217,000 jobs were added to the US economy.  The unemployment rate was unchanged at 6.3%.  April was revised downward by -6,000. There was no revision to the March number.  

Since we knew the general range of job growth and unemployment, as I indicated last Sunday I would focus on the 3 above headline numbers as to "real" unemployment and wages.  These numbers for May tell us that we made no headway - in fact we went backward -  in bringing back discouraged workers into the workforce and into jobs.  

Those who want a job now, but weren't even counted in the workforce were 4.3 million at the height of the tech boom, and were at 7.0 million a couple of years ago.  The big increase this month was not welcome.

After inflation, real hourly wages probably declined slightly from April to May, but April was revised higher.  The YoY change in average hourly earnings is +2.4%.

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were generally positive.

• the average manufacturing workweek rose from an upwardly revised 40.9 hours to 41.1.This is one of the 10 components of the LEI, and will contribute significantly towards a positive number.


• construction jobs increased by 6.000. YoY 188,000 construction jobs have been added.


• manufacturing jobs  also increased by 10,000, and are up 105,000 YoY.


• temporary jobs - a leading indicator for jobs overall - increased by 14,300.


• the number of people unemployed for 5 weeks or less - a better leading indicator than initial jobless claims - rose by 15,000 from 2,447,000 to 2,461,000 compared with December's 2,255,000 low.

Other important coincident indicators help us paint a more complete picture of the present:

• The average workweek for all nonsupervisory workers remained unchanged at 33.7 hours.


• Overtime hours were unchanged at 3.5 hours.


• the index of aggregate hours worked in the economy rose by 0.2 from 108.1 to 108.3.  This is a new record.


• The broad U-6 unemployment rate, that includes discouraged workers decreased from 12.3% to 12.2%.


• The workforce rose by 192,000. (partially offestting last month's number, which was the big Harbinger of DOOOOM at -806,000) Part time jobs for economic reasons decreased by 196,000.

Other news included:

• the alternate jobs number contained in the more volatile household survey increased by 145,000 jobs.  The household survey jobs numbers had been lagging the establishment survey numbers, but as expected this difference has now been entirely made up, with the household survey showing a 1,895,,000 increase in jobs YoY.


• Government jobs increased by 1,000.

• the overall employment to population ratio for all ages 16 and above was unchanged at 58.9%, and has risen +0.2% YoY. The labor force participation rate was also unchanged at 62.8% , and has fallen by -0.6% YoY (but remember, this includes droves of retiring Boomers).

In summary, this report was another good report, with good internals, based on the standard of the last decade.  It is a mediocre report when measured against a longer timeframe.

Where the report is disappointing is in making headway against the real slack in the labor force, including discouraged workers, and in wages, which are still stagnant.

Same old, same old.