Total U.S. nonfarm employment grew in May for the 56th consecutive month as a solid 280,000 jobs were created, accelerating from the 221,000 jobs that were created the previous month. Notably, May’s tally marked the 14th time in the last 15 months that job gains surpassed the 200,000 level. Furthermore, job totals were revised upward for the previous two months by a combined 32,000. In May, the private sector expanded for a record 63rd consecutive month, adding 262,000 jobs, while the government sector gained 18,000. The unemployment rate edged up in May from a seven-year low, ticking up 0.1 percentage points to 5.5 percent, but was 0.8 percentage points below its rate of a year ago. With 397,000 workers entering the labor force in May, the labor force participation rate rose from 62.8 percent to 62.9 percent, but remained just 0.2 percentage points above March’s 37-plus-year low. Driven by a sharp pullback in oil-related job cuts, the number of planned job cuts announced by U.S. companies plummeted 33.4 percent from a 35-month high to 41,034, and were down 22.5 percent from a year ago. Oil prices have been responsible for about 29 percent of the 242,830 planned layoffs year to date as producers and suppliers have been forced to cut production. The Labor Department reported that the average work week rose in May from 33.6 hours to 33.7 hours, 0.1 hour below February’s seven-and-a-half-plus year high, but was flat year-over-year.
Total nonfarm payroll employment expanded for the 56th consecutive month, increasing by a solid 280,000 in May, accelerating from the 221,000 jobs that were created the previous month. May’s tally marked the 14th time in the last 15 months that job gains surpassed the 200,000 level. Additionally, the job figures for March were revised upward from 85,000 to 119,000, and those from April were revised downward from 223,000 to 221,000. Job growth during the 56-month expansionary streak has averaged approximately 203,000 jobs per month. Economists believe that approximately 125,000 jobs must be created per month just to keep up with new workers entering the workforce. Led by job gains in professional and business services (+63,000), leisure and hospitality (+57,000), health care (+47,000), retail trade (+31,000), arts, entertainment, and recreation (+29,000), construction (+17,000), financial activities (+13,000), and transportation and warehousing (+13,000), private-sector payroll employment increased for the 63rd straight month, rising by 262,000 in May after gaining 206,000 the previous month. Approximately 12.6 million jobs have been created in the private sector over the last 63 months, an extension of the longest streak on record for private sector job growth. Meanwhile, government employment has declined in 37 of the last 60 months, although gained 18,000 jobs the previous month and has risen in each of the last four months. Over this 60-month period, government employment has fallen by about 1.1 million. The economy (both the private and government sectors) has fully recovered the 8.7 million total jobs lost between the start of the recession in December 2007 and February 2010 plus has created an additional 3.3 million jobs.
The unemployment rate edged up in May from a seven-year low (lowest since May 2008), ticking up 0.1 percentage points to 5.5 percent, but has fallen in six of the last 10 months and was 0.8 percentage points below its rate of a year ago. The underemployment rate (a.k.a. U-6 unemployment rate), a measure of labor underutilization which accounts for part-time workers due to economic reasons as well as discouraged job seekers, held steady at 10.8 percent in May, matching a six-and-a-half-plus-year low (lowest since August 2008). Nonetheless, the underemployment rate has declined in eight of the last 10 months and was down 1.3 percentage points from a year ago.
With the household survey showing that 397,000 workers entered the labor force in May, the labor force participation rate, the share of working-age people (16 years and older) in the labor force rose from 62.8 percent to 62.9 percent, just 0.2 percentage points above March’s 37-plus-year low (since February 1978) when Jimmy Carter was president and the country was in the midst of stagflation. The aging of America, a modest jobs recovery from the last recession which has kept workers in school longer, and the rising number of workers on disability insurance are theories offered to explain the fall in the labor participation rate since it peaked at 67.3 percent in 2000.
The number of long-term unemployed (jobless for 27 weeks and over) was unchanged at 2.5 million, representing 28.6 percent of the unemployed population. Since April 2010, the number of long-term unemployed has fallen by about 4.2 million, and in the last year, by approximately 0.8 million.
The Labor Department reported that the average work week for production and nonsupervisory employees on private nonfarm payrolls rose in May from 33.6 hours to 33.7 hours, 0.1 hour below February’s seven-and-a-half-plus year high (highest since June 2007), but was flat year-over-year.
After surging to a 35-month high, Challenger, Grey & Christmas reported a plunge in the number of planned job cuts by U.S. companies in May as job cut announcements related to falling oil prices appear to be ebbing, falling from 20,675 in April to just over 1,000 in May. In May, total planned jobs cuts plummeted 33.4 percent to 41,034, and were down 22.5 percent year-over-year. Year to date, employers have announced 242,830 in 2015, which marks a 13 percent increase from the 214,600 job cuts announced in the first five months of 2014. In May, the heaviest downsizing occurred in the financial sector, where announced job cuts will impact 5,539 workers. The bulk of these cuts came from banking giant JP Morgan Chase, which announced that the number of tellers working in its branches will shrink by 5,000 over the next 18 months. John A. Challenger, CEO of Challenger, Gray & Christmas said, “Oil prices are starting to stabilize. Exploration and extraction companies responded quickly to the drop in prices, but they are likely to be careful about cutting too deeply, as they will need workers on hand when demand inevitably increases. Unless, there is another severe drop in the price of oil, we probably will not see another surge in oil-related job cuts this year.”