Job growth disappointed in May, with the economy adding only 69,000 new jobs, nearly 90,000 less than expectations, leading the unemployment rate to rise to 8.2%. April’s job growth was revised down strongly as well, with the economy creating only 77,000 jobs, less than the initially reported 115,000. With the downward revisions, the economy has created fewer jobs in the past two months than the expectations for May alone. Over the past two months the economy has created an average of 73,000 jobs, down from the average of 226,000 seen in the first quarter.
ABA Senior Economist Keith Leggett commented, “Today’s jobs report is very disappointing, it shows the economy is still not firing on all cylinders.”
Today’s disappointing report fueled the flight to safety that we reported on earlier, leading U.S. 10-year debt yields to fall below 1.5% for the first time in history.
The private sector continues to drive growth, creating 82,000 jobs in May, this was partially offset by the government shedding 13,000 jobs. The goods producing sector shed jobs for the first time this year, and has not performed worse since February 2010. Service jobs saw improvement from April’s downwardly revised number, but only added 84,000, down from the first quarter average of 178,000.
The weak job growth, coupled with an increase in the labor force participation rate led the unemployment rate to rise slightly to 8.2%. In May, there were 682,000 new entrants into the labor force, the most since November 2007. In May, the labor force participation rate rose to 63.8%.
Read the BLS Employment Situation.