May Jobs Report: U.S. Economy Adds 175,000 Jobs; Unemployment Rate Up To 7.6 Percent (553 hits)
The U.S. economy continued to churn out LOW-PAYING JOBs in June, as the weakest labor-market recovery since World War II ground sluggishly ahead. Employers added 175,000 jobs to nonfarm payrolls in May, the Bureau of Labor Statistics reported on Friday, up from a downwardly revised 149,000 in April. The unemployment rate rose a tick, to 7.6 percent from 7.5 percent. "Recent progress on jobs is par for the course in a lackluster expansion," Jim Baird, chief investment officer for Plante Moran Financial Advisors, wrote in an emailed note. "The labor market continues to trudge forward at a solid, though unspectacular, pace -- not unlike the economy as a whole."
Wages were mostly STAGNANT in June, with average hourly earnings up just a penny. Over the past three months, wages have risen at a 1.2 percent annualized pace, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. That is not enough to keep up with inflation. And the jobs these people are finding are of the LOW-PAYING VARIETY, as has been the case throughout the recovery. Job creation in June was concentrated in sectors like leisure and hospitality, temp work and retail sales. The higher-paying factory sector actually shed 8,000 jobs in June, while the government sector cut 3,000 jobs. Since the recession ended, more than half of all new jobs have been in such low-paying sectors, according to recent economic studies.
Other measures of the job market were similarly downbeat. The unemployment rate for African-Americans rose to 13.5 percent from 13.2 percent. The U-6 unemployment rate, which includes the jobless and people who are working part-time because they can't find anything better, fell only fractionally to 13.8 percent. And the number of long-term unemployed -- people out of work for 27 weeks or more -- held stubbornly at 4.4 million.
The economy has now added 6.3 million jobs since the labor market bottomed in February 2010, but is still 2.4 million jobs shy of its peak in January 2008. Thus this is the slowest labor-market recovery since World War II. Still, June's labor-force participation rate of 63.4 percent is significantly below the 66 percent that prevailed before the recession. And the total number of unemployed people rose to 11.8 million from 11.7 million.
Some economists estimate that at least 2 million jobs may be missing because of the austerity measures that the government sector has undertaken since the recession ended, including the biggest federal-government spending squeeze since the end of the Vietnam War. And those jobs may not be coming back any time soon. At the current pace of job growth, the economy may not be back to full employment until 2021, estimates the Economic Policy Institute, a liberal think tank.
Also read, "Job Growth To Get Even More Depressing In The Future: Fed Study"
We are at a place where 175,000 new jobs per month is widely considered "good" job growth. According to a new Fed study, it won't be very long before merely adding 35,000 jobs per month is good enough. In other words, enjoy this lousy labor market, because this might be just about as good as it gets in terms of job growth.
