U.S. Unemployment Rate Inched Up In May
RENEE MONTAGNE, HOST:
There are no big surprises in this morning's job report from the government. The unemployment rate increased slightly on moderate job growth. It met or slightly exceeded expectations. This is one of the most significant economic indicators we look at every month, and joining us to discuss the Labor Department's report is NPR's Yuki Noguchi. Good morning.
YUKI NOGUCHI, BYLINE: Good morning.
MONTAGNE: What can you tell us about these numbers?
NOGUCHI: There were 175,000 jobs added, and as you said, that pretty much hit the target of what economists had expected. There were some slight revisions to the previous two months, but nothing hugely significant. Overall, I'd say the Labor Market has settled into a rhythm of slow and steady growth that we've seen for some time now. It seems to be unshakeable.
Things had been looking a little more optimistic in the first three months of this year, when we averaged 207,000 net new jobs. And now we're sort of back down to this level that we'd seen last year. Last year's monthly average was 180,000 net new jobs.
MONTAGNE: And one of the things that is often a factor in determining whether a report is good or bad is what happens with the labor force. I mean, if more people drop out, that can skew the numbers. Did that happen this time?
NOGUCHI: No. In fact, we saw the labor force - that is, the number of people working or looking for work - increase by 420,000. That also explains why the unemployment rate increased slightly from seven-and-a-half to 7.6 percent. You have more people coming back in, and that's a good sign. But it does make the optics of these numbers slightly worse, since it has the effect of raising the unemployment rate. But if there's ever a good reason for the jobless rate to increase, this is it.
MONTAGNE: Right. And one of the things you've said is that the job market is expected to slow this summer. I wonder: Does this report give us any indication about how bad that slowdown might be?
NOGUCHI: We actually have seen job growth decrease since the early part of the year. But as far as government spending cuts, many economists think that the sequester did not have a big impact this month - yet. They say most of that impact will be seen in the summer, and possibly into the fall. But we aren't seeing evidence in this report. People aren't working less or earning less.
MONTAGNE: These are numbers describing most of the economy, but some sectors are doing better than others, and I wonder whether this report says anything about where the jobs are being added and where they're being lost.
NOGUCHI: Not all parts of the economy are moving in the same direction. Professional and business services added jobs, as did the healthcare sector, which has been consistently growing. Manufacturing declined slightly, and the federal government has lost 45,000 jobs in the last three months. And in many ways, that reflects what's going on in the economy.
There's economic slowdown in Europe and China, our biggest trading partners, and that seems, of course, to be having a little bit of an effect here. Also, of course, we've had consistent government contraction for some time. So these numbers are pretty consistent with that.
MONTAGNE: And you mentioned more people coming into the labor force, that being a sign of optimism, I guess, for jobseekers. Are there fewer people unemployed now, or underemployed? I mean, what kind of progress are we making on those numbers?
NOGUCHI: Well, given that we've seen the slow and steady job growth for years now, what you're seeing is, again, slow improvement in those numbers, as well, that you're talking about. There are still 11.8 million unemployed people, and 4.3 million of them have been out of a job for six months or more. But in the last year, both of those numbers have come down by about a million people.
And it's a similar story with the underemployment. The number of people who would like more work is also declining, but, again, slowly.
MONTAGNE: NPR's Yuki Noguchi. Thanks very much.
NOGUCHI: All right. Thank you. Transcript provided by NPR, Copyright NPR.