May Unemployment Report Adds Up To Modest Growth
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
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And I'm Audie Cornish. Steady but not stellar, that's the message today from the government's monthly jobs report. While the economy added 175,000 jobs in May, the unemployment rate ticked up a notch, to 7.6 percent. NPR's John Ydstie explains.
JOHN YDSTIE, BYLINE: The uptick in the unemployment rate in May is actually a somewhat positive indicator. Here's why: It rose not because the economy lost jobs but rather because more people decided to look for work. Remember, the monthly unemployment report is based on two government surveys. In one, businesses report the number of jobs they've added to payrolls.
But a different survey, one of households, provides the unemployment rate. Here's Gary Burtless, a labor economist at the Brookings Institution.
GARY BURTLESS: Employment rose robustly, according to that survey. So, too, did the number of people looking for work.
YDSTIE: In fact, the number of new people looking for work overwhelmed the number who actually found jobs. So the unemployment rate ticked up a tenth to 7.6 percent. Some economists see that as a sign that workers who previously thought it wasn't worth looking for a job have decided that the economy is improving enough to make it worth their while.
Burtless is not so sure about that. Overall, he says, today's report is what we've grown accustomed to in this recovery: steady but lackluster. In fact, the number of private-sector jobs added to payrolls in May exactly matches the average monthly increase over the past three years.
BURTLESS: The recovery just keeps plugging along. We worry about it sometimes, we think it's going to falter, we think it's going to end, but it just keeps chugging along.
YDSTIE: That's true in the service sector but manufacturing lost 8,000 jobs in May, the third straight month of declines. Chad Moutray, chief economist at the National Association of Manufacturers, says that's partly because of weak economies in our export markets. But Moutray says U.S. government budget cuts have also hurt.
CHAD MOUTRAY: You know, those across-the-board cuts have really hurt a lot of manufacturers, particularly those who are in the defense supply chain.
YDSTIE: Moutray says he doesn't think today's report will change the Federal Reserve's view on stimulating the economy. He expects the Fed to begin winding down its stimulus sometime this summer. Stock investors liked what they saw. They drove the major stock indexes higher. John Ydstie, NPR News, Washington.