The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Chief Economist Dr. Andrew Chamberlain:
Today’s jobs report revealed mixed signals about the U.S. labor market. On one hand, the economy added just 38,000 new jobs in May—the weakest job growth since September 2010 and far below most economists’ expectations. Several key industries actually registered job losses last month.
On the other hand, the U.S. unemployment rate fell dramatically to 4.7 percent, the lowest rate since November 2007, suggesting continued tightening of the job market.
One bright spot is wage growth. Wages last month grew at a healthy 2.5 percent year-over-year pace, in line with what most experts were expecting to see. That’s still below the 3-4 percent annual wage growth of normal times, but is consistent with the slow upward trajectory we’ve seen in wage growth over the past year.
Normally a drop in the unemployment rate is good news for job seekers. However, to some extent, a shadow is cast over today’s jobs report by the drop in the labor force participation rate. That rate—which is the fraction of Americans in the workforce—fell by 0.2 percent to 62.8 percent. It’s likely that some of the drop in the unemployment rate today reflects these workers leaving the labor force.
The biggest job gains were in health care (+55,400 jobs), government (+13,000 jobs), retail (+11,400 jobs) and leisure and hospitality (+11,000 jobs). Several industries shed jobs in May. The “information” sector—which includes telecommunications workers—was affected by last month’s strike of nearly 40,000 Verizon workers, and registered a statistical loss of 34,000 jobs as a result. Other big losers were temporary help services (-21,000 jobs), durable goods manufacturing (-18,000 jobs), construction (-15,000 jobs), mining and logging (-11,000 jobs), and wholesale trade (-10,300 jobs).
Overall, while the broader U.S. economy remains relatively strong and stable, the labor market today is clearly in a mild slowing trend. Despite wage growth picking up and unemployment at the lowest it has been in a decade, the broad-based job losses in many industries should give Fed policymakers pause as they consider further raising interest rates this summer.
To speak with Dr. Andrew Chamberlain about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @adchamberlain on Twitter and subscribe to Glassdoor Economic Research.