Not Bad: Labor Force Participation Slightly Higher in May; Unemployment Rate Sticks at 3.6%

(CNSNews.com) – Non-farm payrolls added 390,000 jobs in May, better than the consensus estimate of 350,000, the Labor Department’s Bureau of Labor Statistics reported on Friday. With that gain, non-farm employment is down by 822,000, or just 0.5 percent, from its pre-pandemic level in February 2020.

The number of employed people increased by 321,000 to 158,426,000; the number of unemployed people also increased, by 9,000, and this produced an unemployment rate of 3.6 percent for the third straight month.

In a positive move, the labor force participation rate moved up slightly.

In May, the civilian non-institutional population in the United States was 263,679,000. That included all people 16 and older who did not live in an institution, such as a prison, nursing home or long-term care facility.

Of that civilian non-institutional population, 164,376,000 were participating in the labor force, meaning they were either employed or unemployed — they either had a job or were actively seeking one during the last month. This resulted in a labor force participation rate of 62.3 percent in May, up from 62.2 percent in April, but still a tenth of a point lower than the 62.4 percent achieved in March.

The participation rate was 61.4 percent when Joe Biden took office. Today’s number, 62.3 percent, is still below the Trump-era high of 63.4 percent in February 2020, just before COVID shut things down.

The number of Americans not in the labor force — no job and not looking for one — decreased by 211,000, settling at 99,302,000.

Among the major worker groups, the unemployment rate for Asians declined to 2.4 percent in May. The jobless rates for adult men (3.4 percent), adult women (3.4 percent), teenagers (10.4 percent), Whites (3.2 percent), Blacks (6.2 percent), and Hispanics (4.3 percent) showed little or no change over the month.

In May, 7.4 percent of employed persons teleworked because of the coronavirus pandemic, down from 7.7 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

Notable job gains in May occurred in leisure and hospitality, in professional and business services, and in transportation and warehousing. Employment in retail trade declined over the month.

Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $31.95 in May. Over the past 12 months, average hourly earnings have increased by 5.2 percent.

The change in total nonfarm payroll employment for March was revised down by 30,000, from +428,000 to +398,000, and the change for April was revised up by 8,000, from +428,000 to +436,000. With these revisions, employment in March and April combined is 22,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

President Biden is expected to comment on the latest employment report later this morning.

CBO expects continuing employment growth through 2022

In its ten-year (2022-2032) Budget and Economic Outlook, issued in late May, the Congressional Budget Office predicted that conditions in the labor market would “continue to improve in 2022.”

It also expects employment to grow by 4.1 million jobs and surpass its pre-pandemic (February 2020) level in the middle of this year.

CBO expected the average rate of unemployment to declines through 2023, reaching 3.5 percent, which is a tenth of a point less than it is now. “The annual average has not been lower than that since 1953,” CBO noted.

CBO said it expects the unemployment rate to remain below or near 4.0 percent for the next several years.

The size of the labor force, which, in early 2022 remained roughly one million people below its pre-pandemic level, is expected to keep increasing, exceeding that level by the end of 2022.

“CBO expects the labor force to grow more slowly after 2022 as the negative effects of an aging population outweigh the positive effects of an ongoing economic expansion.”

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