The American economy gained 339,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at 249,000 jobs. The headline unemployment rate ticked up three notches to 3.7%.
This is not a good jobs report, regardless of the topline number. The number of employed people dropped 300,000 while the number of unemployed increased 400,000. Nearly 50,000 people dropped out of the labor force altogether. This is the first decline in employed people since the end of last year.
Teen unemployment went up a full point to 10.3%. Black unemployment also went up a full point to 5.6%. The number of long-term unemployed increased by about 200,000.
Any way you look at it, this is a disastrous report with the sole exception of the number of jobs created.
On the brighter side, blue-collar wages went up at an annualized rate of 5.6%. With annual inflation running at 5.0%, this means wages increased by 0.6%. That's better than nothing.
It sure feels like we are on the precipice of a significant economic slow down...
job losses seem to be isolated to women and the unincorporated self employed. Perhaps self employed women?
How does that work? Did we import 100,000 unemployed people or something?
Retirees are no longer employed but not unemployed.
If it were retirees then we'd expect the unemployed to decrease less than the employed. Unless for some odd reason retirees are counted as "unemployed" rather than simply not in the workforce.
It's not just retirees. Plenty of people without jobs are not counted as "unemployed"--technically, "unemployed" people are people without jobs who are actively looking for work but can't find/haven't found it.
People who are retired, housespouses, going (back) to school, etc. don't count as unemployed.
What seems to be happening is that the trendline is reverting to the prepandemic mean. After two years of adding back jobs at a rapid pace that were lost or put on hiatus during Covid -- not to mention the brakes being applied by the Fed -- this isn't bad. It just isn't the blazing rates we've been seeing the past two years. And, especially now that we appear to have put the debt ceiling crisis behind us, I'm not seeing any serious signs of a recession, either.
So Kevin, our economic overlord, gives a strong thumbs down. I guess that means we should all worry.
But for some reason, I am not.
About 2/3 of his posts are "that thing you're worried about isn't a big deal" so this is just the inverse of that.
An alternative view:
https://www.rawstory.com/objectively-amazing-economists-cheer-extraordinarily-robust-and-close-to-unprecedented-jobs-report/
Any way you look at it, this is a disastrous report with the sole exception of the number of jobs created.
Kevin Drum, our nation's press corps turns its lonely eyes to you.
?
If there are 339,000 net new jobs, how did the number of employed people drop by 300,000? Other than 639,000 people newly taking second (or third) jobs, I don't see how this happens.
Different data sources. The new jobs comes from the establishment survey. It is thought to be more accurate, but doesn't count self employed people and can't distinguish second jobs. The employment numbers come from the household survey. It's noisier but has were reach.
Theoretically they should be close. Kevin sees a bad households report. Others see a good establishment report. The truth is who knows?
Yes, the different surveys are often distinctly different. Also the month-to-month or even quarter-to-quarter differences in these things are often not above measurement noise. Economic predictions have very little reliability in normal times, and these are not normal times.
For example unemployment went from 3.4% to 3.7%, but it has been bouncing up and down by amounts almost this much for many months. This measure and some others are small differences between large measured numbers.
There was a large drop in the household survey of self employment. That's not measured in the establish survey.
Different data sources pretending to measure the same thing.
I am concerned by the rising rate of nattering nabobs of negativism.
Here, we have an unexpectedly hot job market report that includes +93K backward revisions to the last two months combined with 339K in May.
And then if we look at the U-6 alternative measurement of unemployment, we're still sitting at historically (29 years of tracking) low levels of unemployment.
Those are contrails -- from increased number of flights in a red hot economy -- not dark clouds over the horizon.
Curse word for the near universal use of annual (stale) rate of inflation to discuss current economy. Cheers then boos for the NYT sub-hed: "Federal Reserve officials are expected to leave rates unchanged at their June 13-14 meeting. Fresh jobs data might make the choice harder."