Low Numbers Don’t Deter Unemployment Rate

Despite adding just 138,000 jobs in May, the nation’s unemployment rate fell to its lowest level since 2001, the Labor Department reported Friday.

The unemployment rate, at 4.3 percent, and the number of unemployed persons, at 6.9 million, both fell in May. Since January, the unemployment rate has declined by 0.5 percentage point, and the number of unemployed has decreased by 774,000. (

The Bureau of Labor Statistics revised down total nonfarm payroll employment for March from +79,000 to +50,000 and April from +211,000 to +174,000. With these revisions, employment gains in March and April combined were 66,000 less than previously reported. Over the past three months, job gains have averaged
121,000 per month.

The labor force participation rate declined by 0.2 percentage point to 62.7 percent in May but has shown no clear trend over the past 12 months. The employment-population ratio edged down to 60.0 percent in May.

“Underneath the headline, the labor market continues to face a cross-current of challenges,” said John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C. “First, the labor force participation rate has stabilized in recent months, but is below the rates seen for both men and women over the prior two decades. Second, despite steady improvement, those employed part-time for economic reasons remains higher than has been the case in previous expansions. Finally, the long-term unemployed as a percent of total unemployment remains elevated relative to the prior three expansions. These are structural issues that require focused, targeted microeconomic policies, not more macroeconomic policy actions.”

BLS said the average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in May. In manufacturing, the workweek also was unchanged at 40.7 hours, while overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

The report said average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.22. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.00.