Published on: June 02, 2023
BY TED C. JONES, PH.D.
The U.S. added 339,000 net new jobs on a seasonally adjusted basis in May 2023, almost double the 190,000 expected anticipated by Wells Fargo Securities. The Bureau of Labor Statistics (BLS) reported the unemployment rate rose to a still-less-than normal 3.7 percent and that the hourly wage rose 4.3 percent in the past 12-months to $33.44.
Total employment numbers monthly are shown in the graph commencing 2007 with unemployment data detailed in the table starting 2012. The current unemployment rate is less than one-half the level seen a decade ago. Prior to the pandemic, the Federal Reserve viewed full employment when the unemployment rate ranged from 5.0 percent to 5.5 percent.
Monthly job gains (losses) and the corresponding unemployment rates (both seasonally adjusted) are detailed starting in 2018 the next table. Unlike the 2008 recession, this recovery was far quicker even though the drop in total number of jobs was almost three times as severe.
Not all news was good, however. More than 3.7 million workers with jobs were classified as Employed Part-Time for Economic Reasons in May – which means their work hours were cut due to business conditions or slack work demand. These individuals would prefer fulltime employment but cannot find such a job.
The Labor Force Participation Rate (LFPR - percentage of the population that either has or is actively searching for a job), was 63.3 percent in February 2020 (the month prior to the pandemic) and averaged 63.0 percent from 2012 through 2019. After slipping to 60.1 percent in April 2020 at the onset of the pandemic it has recovered to 62.6 percent as of May 2023. If the U.S. had maintained the same LFPR as seen in February 2020 there would be an additional 1.17 million Americans either actively searching for a job or employed today.
Changes across the SuperSectors (as defined by the BLS) as a percentage of all jobs are shown in the next table – monthly for May from 2020 through 2023.
Hardest hit SuperSector at the start of the pandemic was Leisure & Hospitality which hemorrhaged 8.203 million jobs or 48.3 percent of the total segment in March and April 2020. This Sector added 48,000 jobs in May which included 33,000 in Food Services and Drinking Places as both leisure and business travel and activity grows. The Leisure & Hospitality Sector is short just 349,000 jobs from February 2020, however.
Manufacturing employment is detailed in the next graph. Total number of jobs in manufacturing -- 12.98 million in May -- has changed little in the past 12 months ranging from a low of 12.82 million, averaged 12.94 million and peaked at 12.99 million.
Average hourly wages by SuperSector are shown in the next table with May data for each year from 2020 to 2023. Though average hourly wages rose 4.3 percent from May 2022 to May 2023, inflation jumped 5.0 percent (each stated on a seasonally adjusted rate). The largest hourly wage gain in the past year was in the Mining & Logging Sector, up 6.3 percent.
Though the U.S, has a lower-than-normal unemployment level of 3.7 percent, that does not apply to all workers. The last table shows monthly unemployment rates for March, April, and May 2023 plus May 2022 for select educational and demographic cohorts. Teenagers from 16 to 19 years old still have a double-digit unemployment rate at 10.3 percent. Education-wise, those with at least a Bachelor’s degree have less than one-half the unemployment rate versus those with less than a High School diploma -- 2.1 percent vesus 5.7 percent. The unemployment rates for Black or African American’s at 5.6 percent was almost double the 2.9 percent rate for Asians.
To access the latest jobs report from the BLS click here.
For a plethora of employment related metrics click here.
Jobs are everything to the economy with the May 2023 jobs report from the BLS better than expected. The unemployment rate rose from 3.4 percent in April to 3.7 percent in May – just as desired by the Federal Reserve which is working to slow this better-than expected economy in hopes of taming inflation.