Economic: Unemployment Rate Reaches 6.1% for May

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Both nonfarm payroll employment and the unemployment rate were about unchanged in May, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. There were job gains in temporary help services and construction, while losses continued in manufacturing.

Unemployment (Household Survey Data)

The unemployment rate was 6.1 percent in May; the number of unemployed persons was 9.0 million. Over the month, the unemployment rate for Hispanics increased to 8.2 percent. The rates for whites and adult men edged up to 5.4 and 5.9 percent, respectively. The jobless rates for the other major worker groups--adult women (5.1 percent), teenagers (18.5 per- cent), and blacks (10.8 percent)--showed little or no change from the previous month. The unemployment rate for Asians was 5.1 percent, not seasonally adjusted.

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The number of unemployed job losers and persons who completed temporary jobs rose by 309,000 to 5.1 million in May. The number of persons unemployed less than 5 weeks edged up to 3.1 million. There were 1.9 million persons unemployed for 27 weeks or longer in May, about the same as in April. This measure has increased by 347,000 over the past 12 months.

Total Employment and the Labor Force (Household Survey Data)

The employment-population ratio edged down to 62.3 percent in May; total employment, at 137.5 million, was not significantly different from April's level. Over the month, the civilian labor force and labor force participa- tion rate were unchanged at 146.5 million and 66.4 percent, respectively.

Persons Not in the Labor Force (Household Survey Data)

In May, 1.4 million persons were marginally attached to the labor force, about the same as a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 482,000 discouraged workers in May, essentially unchanged from May 2002. Discour- aged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them.

Industry Payroll Employment (Establishment Survey Data)

The following discussion of employment developments from the establishment survey reflects the introduction of new industry classifications.

Total nonfarm payroll employment was little changed (-17,000) in May at 130.1 million. Payroll employment has declined by 2.5 million since peaking in February 2001. The private sector has lost 3.1 million jobs over the same period, with manufacturing accounting for the bulk of the job losses.

In May, employment in natural resources and mining continued the downward trend that began in June 2001. The industry has lost 50,000 jobs over that period, with about half of the losses in support activities for mining. Construction employment rose by 26,000 in May. Employment in specialty trade contractors showed the largest increase. Construction lost 160,000 jobs from March 2001 to February 2003 but has gained back about half of those losses over the last 3 months. The recent job growth has occurred in construction of buildings and in special trade contracting.

Manufacturing employment decreased by 53,000 in May, about the same as its average monthly decline for the prior 12 months. Since July 2000, the industry has lost 2.6 million jobs, a decline of about 15 percent. May job losses were widespread in both durable and nondurable goods. The largest decline occurred in computer and electronic products (-16,000); employment in the industry has decreased every month since January 2001. Transporta- tion equipment employment was up by 9,000 over the month, as workers re- turned from temporary auto plant shutdowns. Since its most recent peak in October 1998, employment in transportation equipment manufacturing has decreased by 320,000.

Employment in wholesale trade continued to trend downward in May. The industry has lost 386,000 jobs since its peak in March 2000. Retail employment was little changed over the month. It declined by 374,000 from its peak in February 2001 through the end of 2002 but has been essentially flat thus far in 2003.

Job losses continued in transportation and warehousing over the month. Employment declined by 5,000 in air transportation; the industry has lost 113,000 jobs since its peak in March 2001.

Information sector employment was essentially unchanged in May. Since its peak in March 2001, the industry has lost 417,000 jobs. Declines occurred throughout the component industries of the sector, including telecommunications; publishing industries, except Internet; and Internet service providers (ISPs), search portals, and data processing.

Employment in financial activities continued to grow in May. Credit intermediation and related activities, which includes mortgage brokerages, added 19,000 jobs over the month. Since July 2000, employment in credit intermediation and related activities has increased by about a quarter of a million.

Professional and business services added 48,000 jobs in May, bolstered by strong growth in temporary help services (58,000). Employment in temporary help services peaked in April 2000 and fell sharply until late 2001. Since then, it has remained at about 2.2 million.

Education and health services employment continued to grow; the industry has added a million jobs since March 2001. Within this sector, employment rose over the month in ambulatory health care services (such as doctors' offices and outpatient care centers). Social assistance lost 10,000 jobs in May, 6,000 of which were in child day care services.

Employment in leisure and hospitality was little changed in May. This industry, which includes arts, entertainment, and recreation; accommoda- tions; and food service and drinking places has lost about 100,000 jobs since January.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls was unchanged in May at 33.7 hours, seasonally adjusted. This followed a decline of 0.1 hour in April. The manufacturing workweek gained 0.1 hour in May, bringing it to 40.2 hours. This followed a decline of 0.3 hour in April. Manufacturing overtime edged up by 0.1 hour to 4.1 hours in May.

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls was unchanged in May at 98.7 (2002=100). The manufacturing index was down by 0.2 percent over the month to 95.0.

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls increased by 5 cents in May to $15.34, seasonally adjusted. This followed no change in April. Average weekly earnings rose by 0.3 percent in May to $516.96. Over the year, average hourly earnings grew by 3.2 percent, and average weekly earnings increased by 2.6 percent.

Source: US Labor Department