The unemployment rate unexpectedly edged up to its highest level so far this year and net job gains were the fewest in eight months.
According to data that the U.S. Bureau of Labor Statistics (BLS) released today, the May unemployment rate increased to 9.1 percent, its highest level since 9.4 in December of last year.
The private sector disappointingly gained only 83,000 non-farm jobs in May. Worse, that number was reduced to a net gain of a mere 54,000 by layoffs in the public sector, as local governments continued their struggle to make ends meet.
Judging by the encouraging trend since February, in which the economy averaged about 220,000 net job gains per month, analysts had optimistically expected about 175,000 new jobs in May, according to USA Today.
However, analysts downwardly revised their expectations on 6/1, because ADP, a provider of employer services, forecasted a weak net job gain of only 38,000 in the private sector. Still, analysts expected the economy to gain about 150,000 jobs overall.
According to various news sources, analysts blame a variety of factors that might have caused employers to unexpectedly slow or reverse hiring and the unemployment rate to rise, such as:
At 44,000, the most notable May net job gains in the private sector were in the professional and business services industry, followed by health care with an increase of 17,000. Next in line was mining, with a net gain of 7,000 jobs.
Construction gained only about 2,000 jobs. According to the BLS, “Employment in the industry has shown little movement on net since early 2010, after having fallen sharply during the 2007-09 period.” That’s likely at least partly due to the ever-decaying housing market.
Manufacturing, an industry that analysts consider to be a gauge of labor market health, lost 5,000 jobs. Until May, the industry had gained an average of about 33,500 per month since the beginning of this year and a total of 243,000 since December 2009.
Among the major work groups tracked by the BLS, teenagers once again suffered the highest unemployment rate (24.2 percent) in May, followed by blacks (16.2), Hispanics (11.9), adult men (8.9), whites (8.0), adult women (8.0) and Asians (7.0 not seasonally adjusted). All but teenagers and whites experienced higher unemployment rates from April, with Asians suffering the largest increase at 0.6 percent.
Unemployment Rate 2008-2011
The unemployment rate, now at 9.1 percent, has ticked up for two months in a row. It increased to 9.0 percent in April, after dropping to 8.8 in March and 8.9 in February. Prior to February, the unemployment rate had been stuck at or above 9.0 percent for 21 months in a row, setting a new post-World War II record.
The unemployment rate does not include workers who are involuntarily working only part time and with fewer benefits, if any, such as no health, disability or life insurance, because they can’t find full-time jobs or employers cut their work hours.
The number of involuntarily part-timers was 8.5 million in May, down from 8.6 in April. The average workweek for both part-timers and full-timers in May was 34.4 hours. Average hourly earnings increased by 6 cents to $22.98.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs.
The number of marginally-attached unemployed workers in May was 2.2 million, down from 2.5. Among the marginally-attached, 822,000 were so-called “discouraged workers” who gave up looking for work due to their shared perception that there are no jobs, down from 989,000. The number of marginally-attached considerably dropped because so many of them re-entered the job market to again look for work. That got them counted in the official unemployment rate, which is one of the reasons why it edged up.
The BLS counted a total of 13.9 million workers as unemployed in May, up from 13.7 in April. The average duration of unemployment increased to 39.7 weeks from 38.3.
The number of long-term unemployed workers, those who have been unemployed for 27 weeks or longer, increased from about 5.8 million to 6.2. State unemployment benefits typically last only 26 weeks without state or federal extensions.
Congress restored previously-authorized emergency and extended unemployment benefits through 2011.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA. Meanwhile, to look for a new job, start at the Job Search page.