The Bureau of Labor Statistics brings bad news for the Obama Administration, as the spring slowdown we’ve seen for the last two years appears to be the same mode for 2012 as well. The economy added only 69,000 jobs in May, and worse, the totals for March and April were revised downward a total of 49,000. So on net, that’s just +20,000 jobs, which is barely positive and not nearly enough to keep up with population. The topline unemployment rate, which briefly was at 8.1% in April, ticked back up to 8.2%. And with April’s revised number coming in at 77,000, this marks two straight months with a job gain of less than 100,000. These are bad numbers.
One of the only positives in the report is that the employment-population ratio and the labor force participation rate both came back a bit. The EPOP now stands at 58.6%, and the LFPR at 63.8%. As that labor force participation rate rises, it will require more jobs to lower the unemployment rate, as you’re basically increasing the denominator. There are about 700,000 more people in the civilian labor force this month as compared to last month.
Long-term unemployment (over 27 weeks) took a big jump up in May to 5.4 million. That’s roughly 42.8% of the unemployed. This is particularly acute, because many long-term jobless are losing unemployment benefits at between 59 and 79 weeks, depending on the state, as per the last extension agreement from the payroll tax cut deal.
The private employment statistics were slightly better, with a gain of +82,000. But that means the public sector has come back to drag down job growth, after a few months of reports where the public sector was fairly neutral. State, local and federal jobs accounted for -13,000.
Health care employment accounted for almost half of the job gains, at +33,000, and “transportation and warehousing” added most of the other half at +36,000. Construction fell big, by 28,000, a bad sign for those anticipating a bounce-back for housing. Manufacturing was up 12,000.
The average work week also fell 0.1 hours, while hourly earnings increased slightly, by 2 cents.
These numbers, if replicated, would cause continued increases in the topline unemployment rate, about the last thing the Obama campaign wants to see. But they are a reminder that, while maybe we don’t have a European crisis on our hands, the economy is still not in good shape. It can barely be said to be in recovery. And we have the ability to borrow money at what amount to negative real long-term interest rates. The sane move would be to do so, and get our economy working again. But sanity is on short supply in Washington.
UPDATE: Let me echo Atrios’ intemperate remarks. This jobs report, and the last three years, represents a total failure by economic policymakers, up to and especially including the Federal Reserve, which has a flawless track record for failure on its key missions, price stability and maximum employment, for years now. They should do something about it, but their ideology tells them no.