Strong Deceleration of Job Growth in May

By: Tom Cunningham, PhD

This morning, the Bureau of Labor Statistics released its national employment situation report for May. The report was underwhelming, with just 75,000 jobs created last month – well below the 180,000 jobs expected. Revisions to the prior two months decreased their strong performance by 75,000, leaving us with an average of 151,000 jobs per month over the last three months – an OK, but not great, pace.

The headline unemployment rate (U30 remained unchanged at 3.6%.  The broader measure of labor underutilization (U6) declined 0.2 to 7.1%.

The lackluster job growth was spread across most sectors. No one sector showed a serious decline, but only health care and business and professional services showed notable gains.

Hourly earnings increased 3.1% year over year, although it missed estimates by a tenth of a point. The average workweek held steady at 34.4 hours in May.

Overall, this isn’t a great report, especially amid fears of a larger deceleration of growth and a possible recession in the near future. The headlines will likely suggest more weakness than is actually in the report, but in the context of other economic developments, this release should add to a cautionary outlook.

 

About the Author

Tom Cunningham, PhD

Tom joined the Federal Reserve Bank of Atlanta as an economist with the macropolicy group in 1985. He was promoted to senior economist in 1989 and to research officer and senior economist with responsibility for the regional group in 1992. Cunningham retired in 2015 after a 30 year career. He has recently joined the Metro Atlanta Chamber’s leadership team as chief economist. Cunningham’s deep experience covers all aspects of applied economics and real estate trends, and he is a specialist in macroeconomic policy and regional analysis. Throughout his career, he has interacted with multiple business leaders and companies in the Southeast, and has deep knowledge and expertise in areas such as real estate mortgage, mortgage finance, insurance, capital markets, transportation and government.

Full Bio

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