According to the US Department of Labor (DoL), the jobless rate was up from 6% in April (See Jobless Rate Jumps; US Payrolls Keep Shrinking) to a nearly nine-year peak. However, many economists had forecast the uptick, noting it could be the last to reflect the weak jobless picture – if the current market rally holds.
The good news in the otherwise still gloomy job picture was that non-farm payrolls were down by just 17,000 – a significantly lower slide than the 151,000-drop suffered in March 2003. April payrolls were revised to an unchanged reading after the DoL had earlier reported a 48,000 job loss. However, March data was also revised down to show a 151,000 jobs drop versus an earlier reported 124,000 fall.
May’s jobs drop was nonetheless an improvement over the 39,000 called for in projections from economists participating in Reuters’ regular survey.
The May jobs report included a major overhaul of the way the DoL compiles its payroll survey and calculates the results. In an encouraging sign, the changes rendered the recent job picture brighter than it had appeared in earlier government estimates (See BLS Updates Payroll Data Methods).
Friday’s payroll figures incorporated
- a new industry classification system
- the final phase-in of a new sampling method
- updated seasonal adjustments
- changes to the way government jobs are counted.
Also, on Thursday the DOL reported that first-time jobless claims for the week ending May 31 were 442,000 – the highest in a month – up from a revised 426,000 the week before (See DoL: Jobless Benefit Applicant Total Jumps by 16,000).
According to the government, average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls increased by $0.05 cents in May to $15.34, seasonally adjusted. This followed no change in April. Average weekly earnings rose by 0.3% in May to $516.96. Over the year, average hourly earnings grew by 3.2%, and average weekly earnings increased by 2.6%.