Employers add 223,000 jobs in May; unemployment falls to 3.8 percent
Friday, June 01, 2018
The labor market is cooking. Nonfarm payroll jobs increased by 223,000 in May versus 164,000 in April, as the unemployment rate dipped to 3.8 percent from April’s 3.9 percent, the Bureau of Labor Statistics reported. Employment growth rose in construction, health care and retail.
Unemployment for major worker groups dipped in May vs. April: adult men (3.5 percent from 3.7 percent), blacks (5.9 percent from 6.6 percent), and Asians (2.1 percent from 2.8 percent). Meanwhile, the rate of joblessness changed little for adult women (3.3 percent versus 3.5 percent), teens (12.8 percent from 12.9 percent), whites (3.5 percent versus 3.6 percent), and Hispanics (4.9 percent from 4.8 percent).
The number of long-term unemployed (those jobless for 27 weeks or more) was 1.2 million in May versus 1.3 million in April. May’s jobless total accounted for 19.4 percent of the total unemployed persons compared with 20 percent in April. Long-term unemployment fell 476,000 over the past 12 months.
The BLS jobs report of declining joblessness marks a continuing labor market tightening during the economic expansion underway after the cessation of the Great Recession in June 2009.
In May, average hourly earnings for all workers on private nonfarm payrolls rose by 8 cents to $26.92 vs. April’s increase of four cents to $26.84. For the year, average hourly earnings are up 71 cents, or 2.7 percent.
"The jobs numbers are good, but wages are not," tweeted Heidi Shierholz, an economist with the Economic Policy Institute in Washington, D.C.
The employment-to-population ratio (the share of the labor force now employed versus the total working-age population) was 60.4 percent in May vs. 60.3 percent in April.
The payrolls of small businesses with 1-49 employees hired 38,000 new employees in May vs. 62,000 in April, according to the ADP National Employment Report. Midsize firms of 50-499 workers hired 84,000 new workers in May vs. 88,000 in April. Companies with 500 or more employees added 56,000 jobs in May compared with 54,000 in April.
According to ADP’s report, service jobs increased 114,000 in May from 160,000 in April. Professional/business services led the way in May with 61,000 jobs versus 58,000 hires in April. Payrolls of the goods-producing sector grew 64,000 jobs in May versus 44,000 in April. Manufacturing firms added 14,000 new jobs in May compared with 10,000 jobs in April.
ADP’s National Employment Report delivers a monthly snapshot of America’s nonfarm private sector employment from actual transactional payroll data, according to the ADP Research Institute that collaborates with Moody’s Analytics. ADP report’s differs from the BLS methodology that surveys firms and households.
"The hot job market has cooled slightly as the labor market continues to tighten," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. "Healthcare and professional services remain a model of consistency and continue to serve as the main drivers of growth in the services sector and the broader labor market as well."
April’s unemployment rate of 3.9 percent marked the first time it was under 4.0 percent since 2000.
"Job growth is strong, but slowing, as businesses are unable to fill a record number of open positions," according to Mark Zandi, chief economist of Moody’s Analytics. "Wage growth is accelerating in response, most notably for young, new entrants and those changing jobs. Finding workers is increasingly becoming businesses' number one problem."
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