The
Bureau of Labor Statistics’ (
Observations from the employment reports include:
* The two surveys diverged rather conspicuously, with
the household survey providing a less upbeat view of employment.
*
Goods-producing industries added 26,000 jobs; service providers: +313,000. Other
industries with significant employment growth included professional and
business services (+64,000), government (+56,000), health care (+52,400),
construction (+25,000), transportation and warehousing (+24,200), and social
assistance (+22,200). Total nonfarm employment (156.1 million) is now 3.7
million jobs above its pre-pandemic level in February 2020 (private sector: +3.9
million; public sector: -209,000). That said, employment is also perhaps 5.3
million below its potential if accounting for growth in the working-age
population since January 2006.
Manufacturing lost 2,000 jobs. That result disagrees with the change in the Institute for Supply Management (ISM) manufacturing employment subindex, which pushed to 51.4 in May. Wood products manufacturing added 800 jobs (ISM was unchanged); paper manufacturing: -1,200 (ISM was unchanged); construction: +25,000 (ISM not yet published).
* The number of employment-age persons not in the labor force edged up (+45,000) to 99.8 million; that level is 4.6 million higher than in February 2020. Because the number of employed fell by 310,000, the employment-population ratio (EPR) ticked down to 60.3%, which is 0.8PP below its February 2020 level.
* With the working-age civilian population growing by 175,000 and labor force expanding by 130,000, the labor force participation rate remained at 62.6%. Average hourly earnings of all private employees nudged up by $0.11 (to $33.44), and the year-over-year increase decelerated to +4.3% (+3.6% on a not-seasonally adjusted basis). Because the average workweek for all employees on private nonfarm payrolls shrank to 34.3 hours, average weekly earnings edged up (+$0.44) to $1,146.99 (+1.8% YoY). With the consumer price index running at an annual rate of +4.9% in April, the average worker is once again losing purchasing power. In fact, average hourly wages had lagged CPI since April 2021; average weekly wages since June 2021.
* Full-time jobs slipped (-23,000) to 134.5 million; there are now 3.7 million more full-time jobs than in February 2020. For perspective, however, the non-institutional working-age civilian population has risen by 7.0 million during that period. Workers employed part time for economic reasons (shown in the graph above) -- e.g., slack work or business conditions, or could find only part-time work -- fell by 164,000, while those working part time for non-economic reasons rose (+68,000); multiple-job holders: +55,000.
For a “sanity test” of the job numbers, we consult
employment withholding/FICA taxes published by the U.S. Treasury.
Although “noisy” and highly seasonal, the data show the amount withheld in May rose
by $18.0 billion, to $255.1 billion (+7.6% MoM; +3.4% YoY). To reduce some of
the monthly volatility and determine broader trends, we average the most recent
three months of data and estimate a percentage change from the same months in
the previous year; the average of the three months ending May was unchanged
from the year-earlier average.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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