Most analysts are describing today’s national jobs numbers report “decent,” as it provided some largely positive news mixed in with some less positive trends. Here’s the good, the bad, and the ugly in the national unemployment numbers for May:
The Good News: The national economy generated 175,000 new nonfarm jobs last month, somewhat ahead of 165,000 jobs many analysts projected. Almost four years since the formal end of the Great Recession, May’s numbers continue a pattern of sustained moderate employment growth since the New Year
And in an additional positive sign, the labor force grew by 420,000, as new workers responded to increased hiring by entering the workforce.
The Bad News: Unfortunately, many of these new workers were unable to find work last month, which swelled the ranks of the unemployed. As a result, the unemployment rate increased from 7.5 to 7.6 percent. But given that this largely the result of the growing labor force, this trend is not quite as bad as it first appears.
The Ugly News: Much like long-term trends in North Carolina, most of this new job creation has occurred in low-wage industries—an ominous sign for middle class economic mobility. Two extremely low-wage industries have experienced some of the greatest growth: Leisure & Hospitality grew by 43,000 jobs and Retail grew by 28,000. Together they account almost 45% of the total job growth last month.
As a result, American workers saw their average hourly earnings rise by just 0.2% from $823.26 to $824.21. This is clearly insufficient to meaningfully improve incomes or boost consumer spending over the next 6 months, both of which will likely hinder future economic expansion.