Job growth slowed last month, according to this morning’s report from the Bureau of Labor Statistics. The Employment Situation Summary showed the addition of 138,000 jobs to public and private non-farm payrolls in May. Reports for previous months were revised downward. March’s numbers dropped from 79,000 to 50,000, and April’s from 211,000 to 174,000.
Unemployment declined to 4.3 percent, but the number of unemployed workers was essentially unchanged at 6.9 million. The labor force participation rate dropped slightly to 62.7 percent.
“The Employment Situation report for May 2017 is surprisingly weak across the board,” said Harry Holzer, author of Where Are All The Good Jobs Going?, in a statement. “Not only did payroll growth, at 138,000, come in well below expectations; but job growth in the previous two months was revised downward substantially. The average over the past three months now stands at just 120,000, well below last year’s average pace of about 180,000.”
“The weak job growth number isn’t a disaster because it still keeps up with population growth,” Paul Diggle, senior economist at Aberdeen Asset Management, told Reuters. “Today’s numbers probably won’t stop the Fed from raising rates this month. But they might well influence what happens next.”
Job Gains in Just a Few Industries
The following industries added jobs last month:
- Professional and business services (+38,000 jobs)
- Food services and drinking places (+30,000 jobs)
- Healthcare (+24,000 jobs)
- Mining (+7,000 jobs)
Other industries remained essentially flat, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, government, and financial activities.
Where’s the Wage Growth?
Average hourly earnings increased by 4 cents to $26.22. In the past year, earnings have risen by 63 cents.
“Wage growth over the past year has averaged 2.5 percent — above inflation but weaker than many expected at this stage in the recovery,” Holzer said.
The PayScale Index, which measures the change in wages for employed U.S. workers, showed that Q1 wages grew 0.5 percent from the previous quarter. However, real wages — the value of workers’ pay with inflation taken into account, decreased 0.4 percent in the same time frame. Since 2006, real wages have fallen 7.4 percent.
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