Unemployment Rate Up, Pace of Job Loss Down
More government data was released today that shows what was expected: more total unemployment cumulatively, fewer jobs being lost than there were half a year ago.
Here are the key nuggets of info from the June 5 Bureau of Labor Statistics report:
Nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The unemployment rate continued to rise, increasing from 8.9 to 9.4 percent. Steep job losses continued in manufacturing, while declines moderated
in construction and several service-providing industries....
The number of unemployed persons increased by 787,000 to 14.5 million in May, and the unemployment rate rose to 9.4 percent. Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has grown by 4.5 percent- age points.
What's that mean? Many economists take the long view, while Wall Street is going gangbusters this week (Dow as high as 8830 on Thursday).
From a WSJ MarketWatch article:
"The pace of deterioration is slowing, but we are still a long way from the point of stability in both the labor market and the broader economy," said David Greenlaw, an economist for Morgan Stanley.
"The U.S. labor market is still weakening sharply, though less sharply than in prior months," said Roger Kubarych, an economist for UniCredit Markets. "Job losses will continue for several more months."
And, from the MarketWatch reporter:
A separate survey of households showed unemployment increased more than expected. Hourly wage growth was tepid, the average workweek dropped to an all-time low, and long-term employment surged -- all factors that should keep consumer spending down and bad debts up.
Long-term unemployment is the highest it's ever been with 3.95 million people unemployed for six months or more. Ouch.
More economists, from a CNNMoney.com article:
Kurt Karl, chief economist at Swiss Re, said he doesn't expect a monthly gain in jobs until at least the middle of 2010. With employers still cutting jobs and hours, he said consumers won't have enough money to spur an economic recovery in the near term...
"That 345,000, while an improvement, is still a lot of jobs," he said. "We're not out of the woods yet."
And from the same article:
Tig Gilliam, chief executive of Adecco Group North America, a unit of the world's largest employment staffing firm, said the average hours worked will have to increase before the economy will be ready to start adding jobs again, as employers will be cautious about restarting their hiring.
Gilliam is also concerned that the number of temporary employees fell for the 17th straight month, another sign of employer wariness.
"That's doesn't suggest a dramatic improvement in hiring soon," he said. "We're still in a difficult labor market and it's going to take us time the rest of this year to work through to where companies are adding back jobs."
Check out this WSJ graphical interactive unemployment chart if you want something with color.
Right now, things still seem fairly black, white and gray.