DATA SNAP:US May Payrolls +54K; Jobless Rate Rises To 9.1%Last update: 6/3/2011 8:30:00 AM=================================================================
May Employment Report ! Consensus: !
May Apr ! Payrolls: +160K !
Payrolls +54K +232Kr ! !
Unemployment Rate 9.1% 9.0% ! Actual: +54K !
Hourly Earnings $22.98 $22.92r ! !
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By Luca Di Leo and Jeff Bater
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Hiring by U.S. companies slowed dramatically in May and the unemployment rate kept rising, adding to concerns the jobs market will still take years to heal as the economy remains weak. Nonfarm payrolls rose by 54,000 last month as the private sector posted the smallest job gain in nearly a year, the Labor Department said Friday in its survey of employers. Payrolls data for the previous two months were revised down by a total 39,000 to show increases of 232,000 jobs in April and 194,000 jobs in March. The jobless rate, which is obtained from a separate household survey, unexpectedly rose to 9.1% in May from 9.0% in April. There are almost 13.9 million Americans who would like to work but can't get a job. Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 160,000 and the jobless rate would edge lower to 8.9%. Even though the recession ended two years ago, the pace of economic growth has been too slow to make up for all the ground lost following the devastating financial crisis of 2008 and 2009. Recent signs point to more economic weakness ahead. The manufacturing sector, once the driver of the recovery, posted its biggest monthly drop since 1984 in May. Friday's report showed private-sector employers, which account for about 70% of the workforce, added only 83,000 jobs in May, the smallest gain since June 2010. That compares with increases of 251,000 in April and 219,000 in March. The breakdown from the employers survey showed manufacturing employment declined for the first time since October 2010. Supply disruptions following Japan's earthquake are expected to have weighed and the sector could pick up speed again later in the year. Employment in professional and business services continued to rise in May, with gains in accounting and computer systems design. Health care jobs also kept growing. But employment in the battered construction sector posted another meager gain. The housing sector remains a big drag on the economy. Government employment fell by 29,000, the seventh drop in a row, mainly as a result of declines in the workforce of state and local governments, which are struggling to close their budget gaps. Even though the private sector has been adding jobs for more than a year, the pace hasn't been strong enough to return the unemployment rate anywhere close to pre-recession levels. Claims filed by unemployed Americans remained elevated last week. President Barack Obama is likely to confront the highest unemployment rate of any postwar incumbent when he seeks re-election in the fall of 2012. After all the money spent fighting the financial crisis, the government has few tools left to stimulate the economy. The Federal Reserve, which sees unemployment around 7.8% at the end of 2012, is expected to keep interest rates close to zero this year to lift the economy. But the central bank is unlikely to expand its huge balance sheet further as concerns of stoking inflation outweigh the potential benefits for stocks. In another sign of the challenges still faced by the labor market, the report showed 45.1% of unemployed Americans, or more than six million people, were out of work for more than six months in May. The longer someone is without a job, the harder it is to find work. Americans' incomes, which are crucial to fuel the spending needed to boost the economy, remained subdued. Average hourly earnings of all employees rose just $0.06 to $22.98. Over the past year, earnings have increased by only 1.8%, and higher prices for gasoline and groceries are squeezing consumer spending. The Labor Department's employment report can be accessed at: bls.gov -By Luca Di Leo, Dow Jones Newswires; 202-862-6682; luca.dileo@dowjones.com
(END) Dow Jones NewswiresJune 03, 2011 08:30 ET (12:30 GMT) |
