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Mark Whitehouse

Why More Jobs Doesn't Mean More Growth

The sectors adding the most workers aren’t among the most productive.
Baumol’s disease at work.

Baumols disease at work.

Photographer: Leon Neal/AFP/Getty Images

How can the U.S. economy keep creating jobs and still grow so slowly? One explanation can be found in the latest employment data: The sectors adding the most workers are among the less productive.

The Labor Department’s monthly survey for May suggests that employers were still in a hiring mood. They added an estimated 138,000 jobs -- less than expected but still enough to push down the unemployment rate, which declined slightly to a 16-year low of 4.3 percent (albeit due to a drop in the number of people actively seeking work -- a requirement for being counted as unemployed). In all, nonfarm payrolls have expanded by more than 16 million jobs since the end of 2009.