This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
As I stood on the set of CNN American Morning, I was nearly speechless as Christine Romans scribbled down the Bureau of Labor Statistics results for last month. The May Jobs report was terrible. Yes, there were 431,000 new jobs created, but don't fall for this head fake. Of the jobs created, a whopping 411,000 were census workers hired on a temporary basis by Uncle Sam.
Let's put that into perspective: the U.S. economy needs to add something in the neighborhood of 125,000 jobs each month just to keep pace with new entrants to the work force and analysts believe that it will take a bunch of 250,000+ jobs a month to really put a dent in the unemployment rate. This was a terrible report.
Adding to the concern: those census workers who were happy to find income even on a temporary basis, will be let go in the coming months. In fact starting in June, the impact of the Census on the payroll report will be negative.
The other area that is worrisome is the stubbornly high number of long-term unemployed. There are 6.8 million people who have been out of work for more than 27 weeks, which constitutes 46% of the 15 million total unemployed. Did I mention that this was a terrible report?
I could find only two bright spots: the unemployment rate dropped to 9.7% from 9.9%, reflecting the departure of 322,000 from the labor force (not the greatest reason to see the rate drop) and the underemployment rate (including part-time and marginally attached workers) fell to 16.6% from 17.1%.
Here's a quick snapshot of the May jobs report:
- Jobs added: 431,000
- Census jobs: 411,000
- Unemployment rate = 9.7% (from 9.9%)
- Under-employment rate= 16.5%
- Long-term (>27 weeks) = 6.8Ml, or 46% of unemployed
- Avg work week=34.2 hours
- Avg Hourly earnings=$22.57 (up paltry 1.9% in last 12 months)
- Manufacturing: +29K
- Construction: -35,000 (reversing the recent uptrend)
- Temp: +31,000 (up 362K since 09/09)
- Health Care: +8,000 (average has been +20K for past year, so this is a weak month)
- April increase of 290,000 not revised, but March revised down to +208K from +230K
One last thing-since we are in the middle of graduation season, I note with some sadness that the unemployment rate for college graduates under the age of 25 has doubled to around 8% since the recession began. Still, it definitely pays off to attend some form of schooling after high school-the unemployment rate for high school graduates under age 25 who did not enroll in college was nearly 25%!
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.