5 Points on May’s Ugly Jobs Numbers

By at 2 June, 2017, 10:12 am


by Raymond J. Keating-

There’s no getting around the fact that the U.S. Bureau of Labor Statistics May jobs report was pretty bad, which followed on a mixed report for April. Let’s consider 5 points:

1- Nonfarm payrolls increased by a mere 138,000 in May. That compared to 174,000 in April and 50,000 in March. Keep in mind that during periods of strong economic growth, gains of 250,000 to 300,000, or more, would be expected.

2- As for the household survey data (which better captures small business and startup hiring), the story in May was grim across the board. Employment fell by 233,000. The labor force dropped by 429,000. The only reason the unemployment rate inched down from 4.4 percent to 4.3 percent was because of the much larger drop in the labor force versus the decline in employment.

3- The labor force participation – hovering at or near three-to-four-decade lows for more than seven years now – has now moved down in two straight months, from 63 percent in March to 62.9 percent in April and 62.7 percent in May.

4- The employment-population ratio, again flirting 30-to-40-year lows for more than eight years, had increased during the first four months of this year, but then fell back in May, dropping from 60.2 percent in April to 60.0 percent in May.

5- The number of unincorporated self-employed – an important, partial measure of entrepreneurship – ticked up ever so slightly (arguably, inconsequentially) in May, after declining for two straight months. The May level stood at 9.38 million (seasonally adjusted), down from 9.67 million in February. Also, consider that the number of unincorporated self-employed in late 2006 stood at 10.86 million. As noted in a recent SBE Council report out – titled Small Business Week 2017: The State of Entrepreneurship and Small Business – we have serious concerns about declining levels of entrepreneurship, which is troubling for the current and future economy.

In the end, this troubling jobs report for May provides a powerful reminder as to why Congress and the Trump administration need to act decisively in key areas like repealing and replacing ObamaCare, implementing pro-growth tax relief and reform, and instituting sound regulatory relief and reform. Without such assertive actions, our economy will continue to meander and under-perform.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

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