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Thursday, June 4, 2015

May 2015 Unemployment Rate; Jobs

May Jobs:  At first glance, NOTHING NEGATIVE.

The pundits were a bit short on new jobs when they contemplated May. 280,000 new jobs were added in May, many more than the 226,000 anticipated. The unemployment rate crept up to 5.5% as about 400,000 people entered the labor force. At first glance, there is NOTHING NEGATIVE in this jobs report. Very bullish, very positive numbers.

If there are many more jobs, as there were in May 2015, but the unemployment rate stays the same or goes up a tenth, as it did in May 2015, this would be a good indication that more people have entered the labor force in May.  This was certainly true in May, as 397,000 people ENTERED the civilian labor force, the largest increase in five months.   

June 2015 numbers were released Thursday, July 2.
Details HERE. 
June: +223,000 jobs, Unemp. Rate down to 5.3%.


There was much concern back in March when the number of jobs added was very low.  I suggested that the less-than-expected increase in the number of jobs may have reflected companies having a harder time filling positions in February and into March:  It was colder and people may have stayed out of the winter job market a bit longer than usual.  I suggested that we would see a rebound in the next months, and the low numbers in March were not a reason to be concerned.  I remain convinced that I was right.  

May 2015 Highlights (Specific reports listed below):
  • +280,000 total new payroll jobs; +262,000 new private sector jobs.  These increases are a bit larger than the consensus of the "pundits", who estimated that we would add about 226,000 jobs in May.  
  • "The change in total nonfarm payroll employment for March was revised from +85,000 to +119,000, and the change for April was revised from +223,000 to +221,000. With these revisions, employment gains in March and April combined were 32,000 more than previously reported. 
  • Over the past 3 months, job gains have averaged 207,000 per month.
  • Unemployment rate increased slightly by .1% to 5.5% as about 397,000 people entered the labor force and started to look for work.
  • Alternate unemployment rate stayed the same at 10.8% as the numbers of discouraged and marginally attched workers fell and the number of involuntary part-time workers increased slightly.  
  • Labor force participation rate increased .1%.  The number of people in the labor force increased by 397,000.  The reported number of people employed increased by 272,000, the reported number of people unemployed increased by 125,000.
  • Number of people working full-time increased by about 630,000 while number of people working part-time decreased by about 232,000.  That's 2,612,000 MORE people working full-time over the past year, since May 2014, and 296,000 MORE people working part-time over the past year. 
  • The number of involuntary part-time workers (people working part-time because they couldn't find full-time work) decreased by 72,000 in May, and it has declined 616,000 over the past year, since May 2015.
  • The number of long-term unemployed (people looking for work over half a year) dropped by 23,000 in May, and has dropped 849,000 over the past year, since May 2014.
Since the "trough" of the recession in late 2009/early 2010 in seasonally adjusted numbers:
  • 12.0 million MORE jobs in total
  • 12.6 million MORE private sector jobs
  • 10.8 million MORE people working
  • 10.8 million MORE people working full-time.
  • 27,000 FEWER people working part-time.  
  • (Yes, despite what you may have heard, from the depth of the recession until now, we have many more additional people working full-time vs. part-time jobs. When a recession hits, companies generally cut back on full-time workers first.  When companies start hiring again, the number of full-time workers increases.)
Since Bush left office & Obama took office (January 2009) in seasonally adjusted numbers:
  • 7.7 million MORE jobs in total
  • 8.3 million MORE private sector jobs
  • 6.6 million MORE people working
  • 5.6 million MORE people working full-time
  • 1.1 million MORE people working part-time

May 2015 reports: (Notation on the links will be changed to "UPDATED for MAY" when the updated reports become available.) 

May 2015 Jobs Numbers Preview as of Thursday night, June 4: 

"The pundits" expect about 
225,000 to 226,000 more jobs when the BLS counts are released tomorrow (Friday) morning at 8:30 a.m., with the unemployment rate staying even at 5.4%.  

f there are many more jobs but the unemployment rate stays the same or goes up a tenth, this would be a good indication that more people have entered the labor force in May.  The outlook for jobs continues to be bullish, but the two consumer confidence calculators come up with different outlooks.

Other than that, unemployment claims, both new claims and continuing claims, continue to be VERY VERY low, lower than they have been for 15 years.
  • The ADP private payroller report came out Wednesday.  ADP estimated an additional 201,000 private sector jobs in May.  Estimates for April were decreased slightly from 169,000 to 165,000.  ADP believes that the numbers of additional private sector jobs had decreased for five months in a row, and this report represents a turnaround.  (Please be aware that the number of private sector jobs had continued to increase from December 2014 to April, just not at the pace of increase of fall of 2014.)

    Comments from ADP:
    "The labor market moved back up to the 200,000 jobs added mark in May, a number which has been something of a bellwether for healthy employment growth,” said Carlos Rodriguez, president and chief executive officer of ADP. “We hope that the May number is the beginning of an upward trend going into the summer months.

    Mark Zandi, chief economist of Moody’s Analytics, said, “The job market posted a solid gain in May. Employment growth remains near the average of the past couple of years. At the current pace of job growth the economy will be back to full employment by this time next year. The only blemishes are the decline in mining jobs due to the collapse in oil prices and the decline in manufacturing due to the strong dollar."
  • "U.S. job growth was likely solid in May and wages probably picked up a bit, suggesting sufficient momentum in the economy for the Federal Reserve to raise interest rates later this year.

    Nonfarm payrolls likely increased by 225,000 positions last month after rising by 223,000 in April, according to a Reuters survey of economists. The unemployment rate is expected to hold steady near a seven-year low of 5.4 percent...
    Payroll gains have slowed from last year's average of 260,000 jobs per month. Economists put the blame on steep job cuts in the mining sector and the restraining impact of a strong U.S. currency on exports and the factory sector.
    If the payroll gain comes in as expected in May, it would mark an acceleration from the first quarter's average of 184,000 jobs per month.
    "It is perhaps a testament to how far the improvement in the labor market has progressed that job gains less than 250,000 now seem to be considered lackluster," said Michelle Girard, a senior economist at RBS in Stamford, Connecticut.
  • Bloomberg writes:  "Data on Thursday showed fewer workers filed applications for unemployment benefits last week, signaling the U.S. job market remains firm following a slowdown at the start of the year. A report Friday from the Labor Department may show steady gains in hiring, with economists predicting a 226,000 increase in non-farm payrolls for May, after they rose 223,000 in April."
  • The Consumer Confidence Index of the Conference Board  increased in May: The Conference Board Consumer Confidence Index®, which had declined in April, increased moderately in May. The Index now stands at 95.4 (1985=100), up from 94.3 in April. The Present Situation Index increased from 105.1 last month to 108.1 in May. The Expectations Index edged down to 86.9 from 87.1 in April. “Consumer confidence improved modestly in May, after declining sharply in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “After a three-month slide, the Present Situation Index increased, propelled by a more positive assessment of the labor market. Expectations, however, were relatively flat following a steep decline in April. While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook."
  • However, while the Consumer Confidence Index was improved in may, the May Consumer Sentiment index compiled by the University of Michigan  showed just the opposite; it fell from 95.9 to 90.7 after rising from March to April.
  • This month job search engine was somewhat lower than most other estimates.  Linkup projects a net gain of 185,000 jobs in May, lower than the 223,000 jobs that were added in April.  (They base their projections largely on job openings.)  They also said:"And with the 1.7% drop in the blended average of new and total job openings on LinkUp in April, we are forecasting that only 185,000 jobs were added to the U.S. economy in May, moderately lower than the consensus estimate of a net gain of 225,000 jobs." 
  • Finally, the number of Americans filing new claims for unemployment benefits AND the number of Americans filing for continuing benefits continue to be very, very low.  From the Department of Labor:
    "In the week ending May 30, the advance figure for seasonally adjusted initial claims was 276,000, a decrease of 8,000 from the previous week's revised level. ... The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 23, a decrease of 0.1 percentage point from the previous week's unrevised rate. This is the lowest level for insured unemployment since November 11, 2000 when it was 2,161,000." 

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