The May 2010 monthly unemployment figures are out. The rate decreased to 9.7% and the number of jobs gained is 431,000. 411,000 of those jobs were temporary Census workers. Only 41,000 private sector jobs were added. The official unemployment rate dropped due to the temporary Census hiring and people plain fell off the count.
Total nonfarm payroll employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010. Private-sector employment changed little (+41,000). The unemployment rate edged down to 9.7 percent
Below is the nonfarm payroll, seasonally adjusted:
The civilian labor force participation rate dropped -0.2%, to 65%. The employment to population ratio, down -0.1% to 58.7% (this is different from the report overview but it is a change). That means there are more employed people to the civilian non-institutional population, as a ratio, than last month (see graph below), which reduces the unemployment rate, but doesn't erase the people now destitute and not being counted.
Those not in the labor force increased by 493,000. The civilian labor force decreased by -322,000. Of those in the civilian labor force, employed, dropped -35,000 in May. This explains the overall drop in the unemployment rate, people simply dropped out of the count even with census temporary worker hirings.
Of those unemployed the number of re-entrants, or people trying again, dropped -286,000. New entrants into the job market who don't have a job dropped -25,000.
- Long term unemployed - 6.8 million
- Forced Part Time - 8.8 million
- Marginally attached to the labor force - 2.2 million
Of the Marginally attached, 1.1 million are discouraged.
U6, or Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force, (table A.15), decreased to 16.6%. Then 46% of the official unemployed have been so for 27 weeks or longer, which is horrific, approaching half.
One needs at least 100,000 and some estimate up to 300,000 permanent full time jobs, added each month to keep pace with U.S. civilian workforce population growth. That's not general population, that's the group needing a job. To even get back to pre-recession unemployment rate levels we need a good 400,000 jobs created each month. That's permanent jobs.
So, how did the unemployment rate tick down? Because more people stopped being counted. Below is the graph of the civilian non-institutional population, which is the largest super-set of the potential labor force, larger than the civilian workforce, due to those who are not looking for work, retired and so on being counted in this figure. It increased this month by 170,000. Unemployment is a percentage, a ratio.
In looking over table B1 we can get a little more detail on what kind of jobs were created (and lost) on the permanent jobs front. These include temporary jobs.
- Financial: -12,000
- Information: 0
- Construction: -35,000
- Manufacturing: +29,000
- Mining & Logging: +10,000
- Health and Education: +17,000
- Leisure and Hospitality: +2,000
- Professional & Business Services: +22,000
- Trade, Transportation, Utilities: +6,000
- Retail Trade: -6,600
- Government: +390,000
In Professional services, 31,000 jobs were temporary.
You probably also want to know the birth/death model. What is that? It's a statistical adjustment to compensate for new businesses and dead businesses who are not actually tallied by data reports. Those jobs created and died outside the statistical reporting time window due to lag. So, the BLS estimates how many jobs can be attributed to those firms which are not actually counted. This month's adjustment was 215,000 jobs. Now one cannot directly subtract the birth/deal model monthly numbers, because unemployment data is seasonally adjusted, yet the birth/death adjustment is not seasonally adjusted, get that? Anywho, jobs attributed to new and dead businesses are just an estimate in so many words.
Notice this report more closely matches the ADP report of +55,000 private sector jobs vs. the BLS +41,000.
The average work week flat lined, an increased of 0.1 hr. to 34.2 hrs/wk. Average earnings (drum roll please), increased 7¢.