How Disappointing Were May’s Unemployment Figures?
What do we make of today’s jobs report? On the surface, it seems like good news all around: 431,000 new jobs in May, and the unemployment rate dipping back down to 9.7 percent. Nothing to complain about there, it would seem. So why the following headline on The Huffington Post?
Well, turns out part of the clue is in the sub-head: the private sector—something of a bellwether for economic growth—did indeed only add 41,000 jobs throughout the month. Worse, according to the accompanying article: “Virtually all the job creation in May came from the hiring of 411,000 census workers. Such hiring peaked in May and will begin tailing off in June.”
So that dip in the unemployment number—down from 9.9 percent last month—is largely the result of temporary hiring, and therefore likely to shoot back up next month? Well, yes, but it would appear that even that doesn’t capture the full story: “The dip partly reflected 322,000 people leaving the labor force for a variety of reasons.” One of those reasons: people giving up looking for work altogether because they’re discouraged by the market.
It’s a strange time to be trying to predict job market movement. On the one hand, you have a constant flow of news suggesting things are getting better in the economy, and that a recovery is well under way. Sure, you get the odd week or two of panic over the Greek economy (and an undercurrent of concern over the PIIGS), but consensus seems to suggest that we’re headed in the right direction. And then you get a weak hiring number. Even more confusing: that weak number comes out in the same week as a study that finds a significant number of employers are planning to hire in 2010.
Confusing, eh? Even the President admitted that “[t]here are going to be some ups and downs,” although he remains bullish—at least on the surface—about the direction of the economy. According to The New York Times, he told workers at a trucking company today that “the economy was ‘getting stronger by the day.'” As proof, he pointed to the fact that May is now the fifth straight month in which jobs have grown—a fact, it should be noted, that would have been true even without the ramp up in Census hiring.
So where does that leave us? Cautiously optimistic? Just glad that we’re not losing jobs anymore? Depressed that things aren’t any better? If anyone knows, feel free to let us know—either in the comments section or on Twitter.