Posted on 04 Jun 2010
Employers added 431,000 non-farm jobs nationwide in May, the biggest increase in a single month in a decade, the Labor Department said Friday. But the bulk of the growth was in government jobs, driven by hiring for the 2010 census, and private-sector job growth was weak.
The unemployment rate fell to 9.7 percent nationwide, from 9.9 percent in April, the department said.
The figures for May represented the fifth consecutive month that payrolls have risen, but fell below analysts’ expectations that 540,000 jobs would be added to the economy. The shortfall sent stocks down sharply on Wall Street. Most of the private-sector gains were in manufacturing, but over all, the figures suggest that non-government hiring was weak.
Altogether, 411,000 of the jobs added were for census workers whose positions will disappear after the summer.
President Obama tried to put a positive spin on the jobs report, telling workers at a trucking company in Hyattsville, Md., that the addition of 431,000 new jobs in May demonstrated that the economy was “getting stronger by the day.”
Mr. Obama acknowledged that temporary workers for the Census Bureau accounted for many of the additional jobs, but he said that hiring in the private sector was also growing. He noted that there has been jobs growth for the last five months.
“These numbers do mean that we are moving in the right direction,” Mr. Obama said. But, he added: “There are going to be some ups and downs.”
In April, nonfarm payroll employment grew by 290,000, but the unemployment rate rose that month because of a surge in the labor force.
“The U.S. employment data was disappointing,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman, in a statement. Mr. Chandler noted that private-sector job creation, a crucial measure, reached only 41,000, compared with expectations for 180,000 and a three-month moving average of 155,600.
“The fact that the unemployment rate ticked down is not really good news,” he added, “as the decline in unemployment was not a function of more jobs but a reflection of people leaving the work force.”
The May figures suggest that the job market still has a long way to go. The economy has to add more than 100,000 jobs every month to absorb the growth in the working-age population. And they are joining a labor pool that is already swollen with 15 million Americans looking for work.
About eight million people have lost their jobs since the start of the recession in December 2007.
“These new data do not present a picture of a healthy private-sector growth, and nothing closely resembling the job growth needed to dig us out of our very deep hole,” Lawrence Mishel, the president of the Economic Policy Institute, said in a statement.
In addition, the quality of the jobs was important as well.
“You would need to be producing 150,000 to 200,000 jobs a month to be making a dent in this,” said Doug Roberts, chief investment strategist for Channel Capital Research.
“If you are getting people back to work but they are earning less, they are spending less,” Mr. Roberts said. “It does not affect the underlying condition.”