U.S. jobless rate falls to 4.7%, yet only 38,000 new jobs added to payrolls
The U.S. labor market continued to shrink as the nation’s jobless rate fell three-tenths of a point to 4.7% in May as the number of unemployed declined by 484,000 to 7.4 million, the U.S. Bureau of Labor Statistics reported Friday (June 3).
Still, only 38,000 new workers were added to U.S. nonfarm payrolls, well below Wall Street expectations and the lowest level of total monthly jobs added to the nation’s labor pool in 2016. In March and April, respectively, the nation’s unemployment rate remained at 5% as 215,000 and 160,000 jobs were added to the U.S. economy during those months.
Even below 5%, the declining U.S. unemployment rate still has not kept up with Arkansas’ blazing job market, which saw the jobless rate touch an all-time low of 3.9% in April. According to the state Department of Workforce Services (DWS), there are now a record number of 1,309,268 workers in Arkansas receiving paychecks.
In a few weeks, the tightening job market will be one of the major topics on the table when the Federal Open Market Committee (FOMC) meets on June 14-15 to consider hiking interest rates. At the last FOMC meeting in late April, where the monetary panel left interest rates unchanged, Fed Chair Janet Yellen expressed some concerns about the labor market productivity and participation rates.
Earlier this week, Creighton University’s Mid-America Business Conditions survey noted that despite low jobless rates in Arkansas and across the regional economy, business executives are still struggling with finding the right workers.
In the monthly survey, supply managers were asked to identify the greatest challenge to 2016 business prospects for their company. More than one-fourth, or 26%, named difficulty in finding and hiring qualified workers as the biggest threat to business operations for the remainder of 2016. Almost one-third, or 32.9%, expect U.S. economic weakness to pose the biggest challenge for business operations for the rest of 2016.
Meanwhile, among the major worker groups, the unemployment rates for adult men (4.3%), adult women (4.2%), Whites (4.1%), and Hispanics (5.6%) declined in May. The rates for teenagers (16%), Blacks (8.2%), and Asians (4.1%) showed little or no change.
Nationwide, total nonfarm payroll employment rose by only 38,000 in May with most of the employment gains occurring in the health care sector. The mining sector, which includes the oil and gas industry, continued to lose jobs, and employment in the information sector decreased due to a continued Verizon strike by union workers.
Health care added 48,000 jobs in May as employment gains occurred in ambulatory health care services (+24,000), hospitals (+17,000), and nursing care facilities (+5,000). Over the year, health care employment has increased by 487,000.
In May, mining employment continued to decline (-10,000). Since reaching a peak in September 2014, mining has lost 207,000 jobs. Support activities for mining accounted for three-fourths of the jobs lost during this period, including 6,000 in May.
Employment in information jobs declined by 34,000 in May. About 35,000 Verizon workers on strike since early April were off payrolls during the month although a tentative agreement was reached this week. Within manufacturing, employment in durable goods declined by 18,000 in May, with job losses of 7,000 in machinery and 3,000 in furniture and related products.
Employment in professional and business services changed little in May (+10,000), after increasing by 55,000 in April. Within the industry, professional and technical services added 26,000 jobs in May, in line with average monthly gains over the prior 12 months.
Employment in temporary help services was little changed over the month (-21,000) but is down by 64,000 thus far this year. However, the number of job losers and persons who completed temporary jobs declined by 282,000 over the month to 3.6 million, BLS noted.
Employment in other major industries, including construction, wholesale trade, retail trade, transportation and warehousing, financial activities, leisure and hospitality, and government, changed little over the month.
Arkansas workforce officials are expected to release Arkansas’ May jobless report on June 17.