Slowing Job Growth in May

By at 11 June, 2019, 7:26 am

by Raymond J. Keating-

The May employment report from the U.S. Bureau of Labor Statistics points to a slowdown in job growth in May and over the past few months.

First, the establishment survey showed that payrolls increased by only 75,000 in May. That also followed on payroll gains being revised downward for March (from +189,000 to +153,000) and April (from +263,000 to +224,000). So far, monthly job gains in 2019 have averaged 164,000 (and 151,000 over the past three months), compared to a monthly averaged in 2018 of 223,000.

Second, the household survey – from which we get key jobs data, and which tends to better capture start-up and small business activity – also pointed to an under-performing jobs gain in May of 113,000.

As for 2019 thus far, the labor force in May (162.65 million), while up compared to April (162.47 million), was down compared to January of this year (163.23 million). The labor force participation rate, after gaining ground from September 2018 (62.7 percent) to February 2019 (63.2 percent), has since retreated (62.8 percent in April and May). In addition, keep in mind that prior to the last recession, the labor force participation rate topped 66 percent.

Employment in May (156.76 million) was down from the high hit in February 2019 (156.95 million). And the employment-population ratio dropped from 60.7 percent in February to 60.6 percent in March, and has stayed there since. Also, to put these numbers in fuller perspective, the employment-population ratio before the last recession exceeded 63 percent.

So, while there’s more work to be done in terms of the overall jobs market, the establishment and household survey indicate that job growth during the last few months have either slowed or stagnated.

On the policy front, this is not about the need for some kind of rate cuts by the Federal Reserve, as some have argued. Rather, the central policy concern is trade, specifically, the U.S. needs to reverse its recent unwise and anti-growth course of tariffs and threats of more tariffs, and get back to being the global leader working in favor of free trade.


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


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