The best way to characterize the May Jobs Report of the U.S. Department of Labor is to call it exactly what it is–good, not so good and bad.
The unemployment rate declined from 8.2% in March to 8.1% in April. This is a good thing– but! The decline was due largely to a decrease in the size of the civilian labor force, which declined by 342,000 workers.
The lower unemployment rate was not the result of the economy adding large number of new jobs. In fact, the economy added only 115,000 jobs (less than half of what is needed and a smaller number than was expected).
The implication is that there is much work to be done to strengthen the economic recovery.
Government spending cuts reduced GDP growth by one percentage point during the first quarter of the year.
GDP Growth was 2.2%, after government expenditure reductions subtracted .92% This means that Congress must be careful in how it goes about balancing the budget.
Here’s why we characterize the Jobs Report as Good, not so Good, and Bad.
Good
- The unemployment rate decreased from 8.2% to 8.1%.
- Black unemployment decreased from 14% to 13%
- The number of jobs created in March was revised upward from 120,000 to 154,000
- Long-term unemployment declined by 207,000 workers
Not so Good
- The economy created only 115,000 jobs in April (the private sector added 130,000 jobs)
- Government sector employment declined by 15,000 jobs
- The manufacturing sector created only 16,000 jobs
- Teenage Unemployment remained high at 24.9%
Bad
- The size of the Civilian Labor Force declined by 342,000 Jobs,
- The number of discouraged workers increased by 103,000 (i.e. those who have given up looking for work)
- The number of employed persons declined by 169,000
- Construction employment declined by 2,000