WASHINGTON, June 1, 2007
Better Than Expected Report On Job Market
More Jobs Added In May, Modest Wage Gains, Steady Unemployment Rate of 4.5%
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(AP / CBS)
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The newest report on the nation's overall employment climate, released Friday by the Labor Department, suggested that the sluggish spell the economy has been experiencing hasn't severely crimped companies' need for workers. Those with jobs saw modest wage gains last month.
"It looks as though the economy is gaining momentum right now, not losing it," Wachovia Bank senior economist Mark Vitner told CBS News' Scott Saloway.
Health care, education, professional and business services, leisure and hospitality, and the government were among the sectors adding jobs in May. But weakness persisted in manufacturing, construction and retailing, partly reflecting fallout from a yearlong housing slump and lingering troubles in the automotive industry.
The new report on labor activity was better than economists were expecting. They were forecasting employers to add just 135,000 jobs in May. They did, however, say they believed the overall unemployment rate would stay at 4.5 percent, considered relatively low by historical standards.
"The average unemployment rate for the last 40 years is 6 percent, and full employment is largely thought to be around 5 percent, so the unemployment rate is very low right now," said Vitner.
"I'm really encouraged at the willingness of companies to invest" in hiring people and in capital equipment, said Carl Tannenbaum, chief economist at LaSalle Bank. "There has been concern over the economy, concern over profits, which had seemed to dampen the enthusiasm of companies to add to their capabilities but those concerns seem to be lifting. We are seeing better hiring," he added.
Wall Street was encouraged, too. The Dow Jones industrials gained 60 points and the Nasdaq was up 19 points in morning trading.
Employers boosted payrolls by 175,000 in March and by another 80,000 in April, according to revised figures released Friday. Job gains for each of those months were just a tad smaller than previously estimated.
Friday's employment report was encouraging, economists said, because it not only indicated many companies are holding up well to the troubles that have plagued housing and the automotive sectors as well as some economic uncertainties but also that many companies are coping well with the recent rise in gasoline and other energy costs.
Friday's employment report was encouraging because it also indicated that companies are holding up well to the recent rise in gasoline and other energy costs.
Education and health services added 54,000 jobs last month. Professional and business services expanded employment by 32,000. Leisure and hospitality boosted payrolls by 46,000 and the government added 22,000 positions. Those gains help to blunt weakness elsewhere. Manufacturers shed 19,000 jobs, mostly reflecting losses in the automotive industry, and retailers cut 5,000. Construction employment showed no change.
Workers saw modest wage gains; average hourly earning rose to $17.30 in May, a 0.3 percent increase from the previous month. That matched economists' expectations. Over the last 12 months, wages grew by 3.8 percent.
Wage growth is important to workers and supports consumer spending, a major force shaping overall economic activity. The modest increase in wages should ease inflation fears.
Against that backdrop, the Federal Reserve is expected to leave a key interest rate alone when it meets next on June 27-28. That would extend a yearlong breather for borrowers.
"The read from today's news is that the Federal Reserve can remain on hold for quite some time," said Vitner. "Even with the economy recharging a little bit, they're not likely to raise interest rates any time soon and they're not likely to cut them either."
Across the country, the job hunt got shorter in May.
The average time the 6.8 million unemployed people spent in their job searches was 16.7 weeks, down from 17.1 weeks in April.
The economy in the January-through-March quarter grew at a rate of just 0.6 percent, its worst showing in more than four years.
Many economists believe the economy in the current April-through-June period rebounded, growing at a pace of around 2.3 percent, which would still mark a sluggish performance.
In other economic news, consumers' incomes dipped in April, but that didn't stop them from spending briskly.
The Commerce Department reported that Americans incomes fell by 0.1 percent in April, a month when the job creation was at its weakest in two and a half years and wage growth slowed. April's income drop followed a robust increase of 0.8 percent in March.
However, consumer spending — a key ingredient to a healthy economy — rose by a strong 0.5 percent in April following a 0.4 percent gain in the previous month.
The spending figure was stronger than the 0.4 rise that economists were expecting. But the income figure was weaker; economists were calling for a 0.3 percent rise.
The report also showed that an inflation barometer closely watched by the Fed — excluding food and energy prices — moderated a bit in April. The measure rose by 2.0 percent over the last 12 months. That was down from a 2.1 percent increase for the 12 months ending in March.
© MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 48 CommentsYou hit the nail right on the head. Keep it up.
Our booming economy hasn't made headlines on this liberal biased website. (New record highs every week) If the Dems get control they'll raise taxes and put the brakes on all the progress that has been made.
piece buried. Liberal media my a/s/s/
Nearly every nation's money supply is inflating as other nations try to maintain price stability while trading with us. There is gobs of cheap debt everywhere to finance phony economic growth and election stealing.
As long as we are borrowing 3 billion a day from the Asians, all this supposed growth doesn't mean squat.
People are probably trying to shore up some debt right now. Things will turn around for the better, it's just a matter of how much time it will take and how hard the landing is before we take off again.
I wish the local bicycle store didn't close. I'd have bought a manual propulsion utility bike as I don't need a car to travel 3 miles to work, the grocer's or much anywhere else. May as well save gas and get healthy during the interim. :-) The chicks would dig the se*y legs too, but I'm saving that for someone special...
Perception5, they said no trolling...
414,000 Americans have moved from the unemployment lines to employment in the past 90 days. Most with health care again and now pay taxes into the US Treasury which is forcing the deficit down sharply.
A "Conservative Wave" is sweeping the planet right now. New Conservative governments in Germany, Mexico, France, and Canada.......................WHY ?? It not because of the war in Iraq ........ These countries are looking across the oceans and from the north of us and to the south and watching this "Republican" economy create millions of jobs........... so many jobs that we have employed 12 million people from other countries.
The Great American Economy.................the greatest story never told by our Corrupt Liberal MSM Wolfpack who work very hard on behalf of their close pals, the Dems, to "derail" our economy with stories on "sub-prime mortgages" and "housing bubble bust" and lying that all the new jobs are just minimum wage (one of the favorite lies)
Thank you Mr. President for doing a great job at managing the economy.........the French, Germans, Mexicans, andCanadians have been getting the "news" from their news organizations......... over here in the States our Corrupt Liberal Wolfpack is "censoring" this great and TRUE story...........REALLY SAD feels like Germany 1938 with America's "free left-wing press".
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how much more of this propaganda - lying and f-ing over of america can we take?
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The important point about the slow employment growth is that not all groups are equally affected. Since May is the month when new college graduates begin to enter the labor force, it makes sense to consider the employed share of the population by educational levels. The employment outlook has actually improved since March 2001 for people without a high school degree, but it has worsened for everybody else.
The employed share of the population without a high school degree increased by 1.8 percentage points to 42.9 percent in May 2007 from 41.1 percent in March 2001. The gains were especially strong for men without a high school degree (see Figure 1). Yet for all other educational levels, the employed share decreased from March 2001 to May 2007.
College graduates saw their employed share drop by 1.4 percentage points from 77.8 percent in March 2001 to 76.4 percent in May 2007. As new college graduates are entering the labor force, the economy is still not providing the same level of opportunity for them that it did more than six years ago.
how much more of this propaganda - lying and f-ing over of america can we take?
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
The important point about the slow employment growth is that not all groups are equally affected. Since May is the month when new college graduates begin to enter the labor force, it makes sense to consider the employed share of the population by educational levels. The employment outlook has actually improved since March 2001 for people without a high school degree, but it has worsened for everybody else.
The employed share of the population without a high school degree increased by 1.8 percentage points to 42.9 percent in May 2007 from 41.1 percent in March 2001. The gains were especially strong for men without a high school degree (see Figure 1). Yet for all other educational levels, the employed share decreased from March 2001 to May 2007.
College graduates saw their employed share drop by 1.4 percentage points from 77.8 percent in March 2001 to 76.4 percent in May 2007. As new college graduates are entering the labor force, the economy is still not providing the same level of opportunity for them that it did more than six years ago.
414,000 Americans have moved from the unemployment lines to employment in the past 90 days. Most with health care again and now pay taxes into the US Treasury which is forcing the deficit down sharply.
A "Conservative Wave" is sweeping the planet right now. New Conservative governments in Germany, Mexico, France, and Canada.......................WHY ?? It not because of the war in Iraq ........ These countries are looking across the oceans and from the north of us and to the south and watching this "Republican" economy create millions of jobs........... so many jobs that we have employed 12 million people from other countries.
The Great American Economy.................the greatest story never told by our Corrupt Liberal MSM Wolfpack who work very hard on behalf of their close pals, the Dems, to "derail" our economy with stories on "sub-prime mortgages" and "housing bubble bust" and lying that all the new jobs are just minimum wage (one of the favorite lies)
Thank you Mr. President for doing a great job at managing the economy.........the French, Germans, Mexicans, andCanadians have been getting the "news" from their news organizations......... over here in the States our Corrupt Liberal Wolfpack is "censoring" this great and TRUE story...........REALLY SAD feels like Germany 1938 with America's "free left-wing press".
THEN the wealthy economists, (and right-wing talk show hosts), would actually see the dregs of the economy that we middle-class people face!
I'm willing to bet that those jobs reports would show fewer and fewer of the "new" jobs are paying more than they used to 5 or even 10 years ago.
Posted by ncolsens
The U-3 unemployment (the one reported here) rate is based on a household survey, if you worked even one hour out of the previous month (such as babysitting for an hour) you are counted as being employed.
tubes with all the jobs going overseas and the
huge housing slump...People, don't believe it.
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