Jobless rate climbs to 7.6 percent

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U.S. employers added 175,000 jobs in May, but all jobs aren't created equal.

The report issued by the Bureau of Labor Statistics showed the economy is still deeply in the hole when it comes to manufacturing and construction jobs, which are high-paying fields, said Dean Baker, an economist with the Center for Economic Policy Research in Washington, D.C.

Instead, the jobs being created are in leisure and hospitality, which added 43,000 positions in May.

While the number of positions added last month was more than economists had predicted, the unemployment rate rose from 7.5 percent in April to 7.6 percent. Figures are seasonally adjusted to take out regular spikes and troughs.

Wall Street responded by opening above Thursday's close and rising through the day. The Dow Jones industrial average was up 207.5 points, or 1.38 percent, to close at 15,248.12. Standard & Poor's 500 Index closed up 20.82 points, or 1.28 percent, to 1,643.38 and Nasdaq rose 45.16 points, or 1.32 percent, to close at 3,469.21.

Manufacturing lost 8,000 jobs, even as the average workweek for factory employees rose by six minutes to 40.8 hours. Overtime in the sector held steady at 3.3 hours. The number of workers making primary metals such as steel and aluminum dropped by 2,200. As of May, there were at least 2 million fewer manufacturing jobs than in May 2007, before the Great Recession.

Construction added 7,000 jobs in May, but, like manufacturing, remains far below pre-recession employment levels. Last month, there were more than 1.8 million fewer construction jobs than in May 2007.

Scott Paul, president of the Alliance for American Manufacturing, called that "a direct consequence of our widening trade deficits with Japan and China."

The alliance has put a ticker on its website to track the creation of manufacturing jobs to see if it is in line with President Barack Obama's goal to create 1 million in his second term. In the first five months of Mr. Obama's second term, employment in manufacturing is up by 16,000 jobs (an average of 3,200 a month). To make his goal, the economy needs to create an average of 22,884 factory jobs a month.

Meanwhile, the leisure and hospitality sector -- which includes hotel, amusement park and restaurant employees -- has grown by nearly 50,000 from May 2007.

Those are the sorts of jobs that are taken, Mr. Baker said, when higher-paying work is not available.

Alan Krueger, chairman of the White House's Council of Economic Advisors, noted the labor force participation rate ticked up one-tenth of 1 percent from 63.3 percent in April to 63.4 percent in May. In his written analysis of the economic situation, he called it "a sign that more workers felt encouraged to search for a job."

If the labor force participation rate were 66 percent, as it was in 2007 when the recession started, there would be another 6.3 million more workers in the labor force looking for jobs.

In May, there were 11.7 million people who were unemployed and looking for work, including 4.3 million who have been out of work for more than six months.

Another way of viewing the unemployment situation is to take a look at what some economists call the "real unemployment rate," which includes people who are working part time for economic reasons and the people who have stopped looking for work, but want a job.

That rate in May was 13.8 percent, down from 13.9 percent in April. The real unemployment rate, which hit a recession high of 17.1 percent in late 2009 and early 2010, was 8.8 percent when the recession started.

nation - employment

Ann Belser: abelser@post-gazette.com or 412-263-1699.


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