138,000 jobswere created in May, falling well below the expectations, while the unemployment rate fell to 4.3%, its lowest mark since 2001. The U6 rate fell to 8.4%, a number that includes those not actively looking for jobs as well as those working part-time. That is it’s lowest since 2007. The labor participation rate is down at 62.7% which means that workers that were sidelined did not return to the labor force. Looking at the adjusted numbers for March and April, average growth is about 130k jobs per month, well short of the 1 million jobs that President Trump has attempted to take credit for this year.
Wage growth also disappointed, with average hourly earnings rising at a 2.5 percent. The average work week was unchanged at 34.4 hours. As the economy continues to expand and comes closer to “full employment” wages should rise as companies stretch to attract new workers, yet this rapid wage growth is not taking place.
The headlining numbers from the April Jobs report were very strong. The economy added 211,000 jobs and the unemployment rate fell to 4.4%, the lowest number in more than a decade. Average hourly earning rose by 0.3%. Job creation has bounced back from the disappointing March numbers which were revised down to 79,000.
The largest private sector job growth was seen in leisure and hospitality at 55,000. Professional and business services were up 39,000. Healthcare added 37,000.
The number of unemployed declined by 146,000, with the number of new workers up to 156,000. The Labor Force Participation rate is 62.9%.
The U6 rate, that includes those not actively looking for jobs as well as those working part-time, dropped to 8.6% (down from 8.9% in March). This represents the lowest number since November 2007.
“This just adds to the perception that it’s going to be easier and easier to find a job if you want one these days. It’s job security that causes people to as for wage rises. If it’s easier for them to get a job outside their company, they’re more likely to push for higher wages.” — Brian Coulton, chief economist at Fitch Ratings.
Employers should be taking this opportunity to make sure that they are staying on top their unemployment costs. While the climate is good, the time is right for companies to shop around to find the best software and most efficient processes to protect themelves from those inevitable changes in the employment landscape. Contact Unemployment Tracker for more information on effective UI cost management.