The jobs picture in a word – sucks.
The nation’s job market showed clear signs of recessionary conditions as the jobless rate leapt up a half percent in May, from 5.0% to 5.5%, according to today’s report from the Bureau of Labor Statistics. This monthly increase was the largest since the mid-1980s, pushing unemployment to its highest rate since late 2004.
Payrolls contracted for the fifth month in a row, down 49,000 with most of the net job losses occurring in the construction industry, factories, offices, and retailers. Since total payrolls (public and private sector) peaked last December, they are down by 324,000 jobs. Since the government sector tends to be less cyclically affected by downturns, looking at just private-sector job loss can provide a more accurate gauge of the lagging economy’s impact on job growth; private-sector employment has fallen over the past six months by 411,000.
Although single month jumps in unemployment data should be judged cautiously, various factors suggest the spike in unemployment is not likely to be a statistical aberration and instead accurately reflects the weakening job market. First, it is consistent with the steady loss of jobs in the more accurate payroll survey. Second, as noted by the commissioner of the BLS, “The over-the-month jump in unemployment reflected additional workers who had lost their jobs as well as an upsurge in new and returning jobseekers.” (more…)