Job growth accelerated in May while the unemployment rate ticked up by 0.1 percent, due to more unemployed workers looking for jobs.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 262,000 nonfarm job gains in May. Local, state and federal governments gained 18,000 nonfarm jobs.
The total net job gains in May were 280,000, 60,000 more than economists had estimated and the most since December 2014. The unemployment rate edged up from 5.4 to 5.5 percent, but it was still the lowest rate since May of 2008 when it was 5.4 percent and rapidly rising.
The private sector has now gained nonfarm jobs for 63 consecutive months since the Great Recession, the longest streak of uninterrupted job growth in U.S. history. The unemployment rate has dropped 4.5 percentage points from the recessionary high of 10.0 percent in October 2009.
The BLS also revised job gains for March and April, showing that the economy netted 32,000 more jobs than the BLS had previously estimated. After BLS revisions, net job gains have averaged 207,000 per month since the beginning of 2015. That brings the total number of jobs created so far this year to over one million.
Job growth continued in the professional and business services industry at 63,000, with temporary help services (temp workers) netting 20,000 of those. This industry as a whole has created 671,000 jobs since June of last year.
After little change in the past 2 months, job growth in the leisure and hospitality industry increased by 57,000 in May. However, job growth in food services and drinking places has changed little over the past 3 months.
At 47,000, job growth also continued in health care. The industry has added 408,000 jobs over the past year. Much of the industry’s steady job growth over the past few years, even throughout the Great Recession, is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.
Manufacturing, an industry that economists consider to be a gauge of labor-market health, netted only 7,000 jobs in May. Construction, also a measure of labor-market health, gained 17,000 jobs thanks to warmer weather. Construction has added 273,000 jobs in the past 12 months.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (17.9 percent) followed by blacks (10.2), Hispanics (6.7), adult women (5.0), adult men (5.0), whites (4.7) and Asians (4.1, not seasonally adjusted). No group experienced a significant change in their May unemployment rate except for teenagers and blacks, who each saw a rise of less than 1 percent.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.7 percent unemployment rate in May, the same as in April. Those in the same age group and who don’t have high school diplomas suffered a much-higher 8.6 percent rate, the same as in April.
The unemployment rated edged up in May, mostly because the civilian labor force increased by 397,000. Out of those, 103,000 were new entrants (never worked) into the job market.
For the BLS to count workers as officially unemployed, new entrants plus others must be actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in May was 8.7 million, up from 8.5 million in April. The number of unemployed persons has dropped by 1.1 million over the past year.
The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in May was 6.7 million, up from 6.6 million in April.
The average workweek for all part-timers and full-timers in the private sector remained at 34.5 hours from March through May. Their average hourly earnings rose 8 cents to $24.96, a solid increase. Average hourly earnings in May were up by 56 cents (2.3 percent) from a year ago. Average hourly earnings rose by 6 cents to $20.97 for private-sector production and nonsupervisory employees.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs.
The number of marginally-attached workers in May was 1.9 million, down from 2.1 million in April. Among the marginally-attached, 563,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was down by a significant 193,000 from the 756,000 that the BLS initially reported for April. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been without jobs for 27 weeks or longer, was 2.5 million in May, the same as in April. These workers accounted for 28.6 percent of the unemployed. The number of long-term unemployed workers has declined by 849,000 over the past 12 months. Standard state unemployment benefits last only up to 26 weeks without extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
Many economists agree that the compensation from unemployment benefits almost immediately stimulates the economy, because most recipients quickly spend all of it on necessities.
For more details about the May 2015 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the June 2015 unemployment rate and job numbers on July 2. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.