May Jobs Report: For Once, the Economists Called It

Students training to become electrical linemen ascend poles during class at Los Angeles Trade-Technical College in Los Angeles on March 12 Photograph by Patrick T. Fallon/Bloomberg

They nailed it: The U.S. economy added 217,000 new jobs in May, which means that economists forecasting the number were actually right this time. Almost. The average guess of the 92 economists surveyed by Bloomberg was for a gain of 215,000. It’s not spot on, but it’s the closest they’ve come to forecasting the real number in years.

It wasn’t just the headline number that was in line with most forecasts: Economists thought the unemployment rate might tick up to 6.4 percent, but it stayed the same at 6.3. After no change in April, average hourly earnings were up 0.2 percent, which was also in line with expectations.

Lots of other stuff pretty much stayed the same: 9.8 million people are still unemployed, and a third of them have been out of work for at least half a year. The work week stayed the same. So did the unemployment rate for most demographics: adult men and women, teenagers, whites, blacks, hispanics. That was all unchanged. The dreaded labor force participation rate, which is on a 14-year nosedive, held fast at 62.8 percent. Not great, but at this point, not declining is good news.

The labor force participation rate peaked in 2000 above 67%

The headline from the May report isn’t quite as good as April’s 288,000 new jobs, but it also lacks some of the schizophrenia of April’s report, which, despite a boffo topline number, contained some real ugly data beneath the surface. One fear with this report was that the April data would turn totally sour with a big downward revision. The figures were revised down, but only by 6,000, to 282,000. Other highlights:

The economy has finally recovered all the 8.7 million jobs lost during the recession. It took only six-and-a-half years, but the U.S. now has more jobs today (138.4 million) than it did at the previous peak in January 2008 (138.3 million).

The pace of job growth is still going up. The economy has added an average of 188,000 jobs a month over the past two years, 198,000 over the past 12 months, and 213,600 since the beginning of the year. If that keeps up for the rest of the year, it’ll be the strongest pace of job growth in more than a decade. Not bad for a recovery that’s now five years old.

Job gains were spread broadly over most sectors of the economy, with 63 percent of industries increasing their payrolls. Service-producing sectors saw the biggest share of gains, with a total of 198,000 workers added. Overall, the private sector added 216,000, while government staffing was up about 1,000.

The federal government continues to shed workers. Another 5,000 jobs were lost in May. In the past 12 months, the federal government’s payroll has declined by 63,000, a 2 percent drop.

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