Unemployment was Up in May, but that Might Be a Good Thing...

Mish Shedlock  |

The jobs report for May released today showed good numbers for the labor force, establishment jobs, and household employment. In contrast to April, this month's report was not marred by huge growth in part-time employment. Surveys showed that household employment rose by 272,000, while unemployment rose by 125,000. That means more people actively seek jobs. They are back in the labor force. As a result, the unemployment rate rose by 0.1% to 5.5%.

Let's take a look at all the key numbers:
BLS Jobs Statistics at a Glance 

  • Nonfarm Payroll: +280,000 - Establishment Survey
  • Employment: +272,000 - Household Survey
  • Unemployment: +125,000 - Household Survey
  • Involuntary Part-Time Work: +72,000 - Household Survey
  • Voluntary Part-Time Work: -95,000 - Household Survey
  • Baseline Unemployment Rate: +0.1 to 5.5% - Household Survey
  • U-6 unemployment: +0.0 to 10.8% - Household Survey
  • Civilian Non-institutional Population: +189,000
  • Civilian Labor Force: +397,000 - Household Survey
  • Not in Labor Force: -208,000 - Household Survey
  • Participation Rate: +0.1 to 62.9 - Household Survey

March 2015 Employment Report 

Please consider the Bureau of Labor Statistics (BLS) Current Employment Report.

Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5%, the US Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Meanwhile, mining employment continued to decline. 

Unemployment Rate - Seasonally Adjusted

Hours and Wages

Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours. Average hourly earnings of production and non-supervisory private workers rose $0.06 at $20.97. Average hourly earnings of production and non-supervisory private service-providing employees rose $0.06 at $20.77.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?
Birth Death Model 

Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number - that approach is statistically invalid. 

Table 15 BLS Alternate Measures of Unemployment

Notice I said "better" approximation, not to be confused with "good" approximation.

The official unemployment rate is 5.5%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 10.8%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.

For more of Mish's insights and opinions on markets in the US and across the globe, follow this link to Mike Shedlock’s blog

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