May's Jobs Report Falls Short Of Expectations
STEVE INSKEEP, host:
And now let's get the latest on the unemployment figures out today. The Labor Department says the unemployment rate fell in May, just a bit, to 9.7 percent. That's a decline of 2/10ths of a percentage point. The number of jobs created also increased, but this news may not be as good as it looks. NPR's economics correspondent Jim Zarroli is here to help us make sense of the numbers.
JIM ZARROLI: Good morning, Steve.
INSKEEP: So what are the numbers, and what do they mean?
ZARROLI: Well, everybody had thought this would be a really good report, and maybe the expectations were too high. The numbers are actually pretty disappointing. The economy added 431,000 jobs, which in any normal time would be terrific. The problem is 411,000 of those jobs were temporary census jobs, and they're going to disappear in a few weeks or even months. So what we're really left with is a gain of about 20,000 jobs, the private sector more like 41,000. What gains we did see were in manufacturing, business services and health care, but construction was down again. So, on balance, not a good report.
INSKEEP: And just so that we're clear, because you gave some numbers that didn't necessarily add up to 437,000 there, there's also some government jobs that went away, even as those temporary census jobs came in - in any case, not a lot of private sector jobs being created there. Correct?
ZARROLI: Right. Right. I mean, you can't - you shouldn't really look at one month's numbers, because, of course, they can be misleading. But if you look at the past three months, we have gained, on average, 125,000 jobs a month. And, you know, it's better than we - where we were a year ago, when we were losing so many jobs. But it's still not the kind of increases that you want be seeing if you're in a meaningful recovery. A lot of economists would say that's not even enough to keep pace with population growth. We still had 15 million unemployed people last month. And so, you know, we have a long way to go to repair the job market. And at this rate, it's not going to happen for quite some time.
This is, by the way, not what President Obama and the Democrats want to see in an election year. The president spoke this morning. He kind of tried to emphasize the positive. He said this was the fifth month in a row of job gains, but we're going to see ups and downs.
INSKEEP: It's surprising, as well, because the president also went out on a limb this week and forecast that this would be an encouraging - a good jobs report.
ZARROLI: Yeah, he did, which was a little bit unusual. But all the economists were projecting that we would see, you know, 200, 300,000 new jobs aside from the census workers. So, you know, I guess he felt he - the odds were we were going to see a much stronger report than we've seen.
INSKEEP: Any encouraging news, here?
ZARROLI: Manufacturing was up by about 29,000 jobs. That's, you know, been a sector that has lost a huge number of jobs for a very long time. There was also a slight increase in the length of the average work week, which is good. It means, you know, companies are doing more. They need labor. What they're not doing is really hiring in any significant way. It's like, you know, they kind of went through this big shock in 2008 and laid off a lot of people, and they're still kind of shell-shocked, and they just don't want to hire.
INSKEEP: And so how might this affect the stock market?
ZARROLI: Well, the stock market was already sort of primed to lose ground even before this report came out. That was, once again, because of - you know, you probably can guess - because of nervousness about Europe. There have been rumors that the French bank Societe Generale has suffered big derivatives losses. And then there were some new worries about another player in Europe, which is Hungary, having debt problems. That's been a source of concern.
So the European markets were already down quite a bit, even before this report came out, and the report just sort of adds fuel to the fire. We saw the U.S. stock markets come down quite a bit right after the open this morning. Of course, that could change as the day goes on. But the unemployment report really is disappointing, and it should serve as a reminder that things don't always work out the way we expect.
INSKEEP: I feel like everything you've just said, Jim Zarroli, boils down to the same point: You have employers doing more, but not adding jobs, necessarily. You have investors holding back somewhat - just some doubts, still, about the future, here.
ZARROLI: Yeah. And, you know, we've seen this gradual improvement in the economy for a long time, but there's still just a lot of fear and nervousness out there. People are just not fully convinced that things are getting better, I guess.
INSKEEP: NPR's Jim Zarroli. Thanks very much.
ZARROLI: You're welcome.
INSKEEP: This is NPR News.
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