An Analysis of the May 2015 Unemployment Report
The Bureau of Labor Statistics of the Labor Department released the May Employment situation report on Friday, June 5th 2015. The economic report also known as the "Unemployment Report". The report is the key measure of how well out the economy is benefiting working and poor people. The report includes a couple of key statistics that describe the real economy for the average American.
The US National unemployment rate(U-3) moved up slightly to 5.5%. The Black unemployment rate was 10.2%. The broadest and most realistic measure of unemployment, U-6, stood at 10.8% and wages (average hourly earnings) rose 8 cents. The work week was unchanged at 34.5 hours.
The business employment report(Non Farm Payrolls) showed a gain of 280,000 positions. Jobs gains occurred in Trade and Transportation, Business Services, Leisure and Hospitality and Healthcare. The Government sector saw 18,000 new positions but 15,000 were local. Information Processing job shrank by 3K.
Figure 1. Non Farm Payroll Changes. June 2015. Source: BLS
The labor force participation rate was 62.9%. The rate has not changed in a year and been with 1% of 63% for the past 3 1/2 years. So the number people joining the labor force is almost exactly matching the number of new jobs. The situation is not good for wages, since there is no demand pressure driving wage higher.. An additional 397,000 people joined the labor force.
Figure 2. Unemployment Rate and Labor Force Participation Rate, June 2015. Source: BLS
The number of people unemployed increased by 125,000 to 8.67 million. Workers continued to rejoin the workforce and actively look for work, so they are now included in the unemployment counts.
The number of long term unemployed stayed at about 2.5 million. The figure has dropped by 300,000 since Jan 2015.
The Big Story
The number of new payroll jobs came it at an above expected 280K after a slow growth spring. The GDP grew by 3.7% (annual rate) in the 2nd quarter after growing just 0.6% in the 1st quarter.
News of the Political Economy
No important news as government continues to shrink. The Dow Jones Industrial Average dropped below 18,000 index value as investor assume the fed will raise interest rates based on the strong jobs report.
Black Unemployment Situation
As stated earlier, the Black unemployment rate moved up to 10.2% because 120,000 newly unemployed people lost their jobs. The number of Black unemployed was nearly two million (1.988 million)
The Black labor participation rate was stable to 62%. The rate has been near 62% since January 2012.
Household Employment Details
Establishment (Business) Survey Results for February
Among the key industry sectors, Business Services added 63,000 jobs, total healthcare and social worked posted 58K new positions and leisure and hospitality increased by 57, 000.
Government increased by 18,000 jobs but 15,000 were at the local level.
Non-Farm Payroll Revision
The March NFP number was revised upward by +34,000 from 85K to 119K while the April number was revised downward by 2k (+223K down to +221K)
ADP reported a non farm private employment increase of 201,000 jobs. Small business (1-49) employees accounted for 122,000 new jobs. Medium sized business(50-499) added 65,000. And large businesses(500 workers or more) added only 13,000 employees. ADP also reported that