Friday, June 04, 2021

Comments on May Employment Report

by Calculated Risk on 6/04/2021 09:22:00 AM

The headline jobs number in the April employment report was below expectations, however employment for the previous two months was revised up slightly.  


Leisure and hospitality gained 292 thousand jobs.  In March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 2.54 million jobs since February 2020.  So leisure and hospitality has now added back almost 70% of the jobs lost in March and April 2020.

Construction employment declined 20 thousand in May, and State and Local education added 103 thousand jobs.  Manufacturing added 23 thousand jobs.

Earlier: May Employment Report: 559 Thousand Jobs, 5.8% Unemployment Rate

In April, the year-over-year employment change was 11.900 million jobs. This turned positive in April due to the sharp jobs losses in April 2020.

Permanent Job Losers

Year-over-year change employmentClick on graph for larger image.

This graph shows permanent job losers as a percent of the pre-recession peak in employment through the May report. (ht Joe Weisenthal at Bloomberg).

These jobs will likely be the hardest to recover.

This data is only available back to 1994, so there is only data for three recessions.

In May, the number of permanent job losers decreased to 3.234 million from 3.529 million in April.

Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The prime working age will be key in the recovery.

The 25 to 54 participation rate was unchanged in May at 81.3% from 81.3% in April, and the 25 to 54 employment population ratio increased to 77.1% from 76.9% in April.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of persons employed part time for economic reasons was essentially unchanged at 5.3 million in May but is 873,000 higher than in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."
The number of persons working part time for economic reasons increased slightly in May to 5.271 million from 5.243 million in April.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 10.2% from 10.4% in April. This is down from the record high in April 22.9% for this measure since 1994.

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 3.752 million workers who have been unemployed for more than 26 weeks and still want a job, down from 4.183 million in April.

This does not include all the people that left the labor force. This will be a key measure to follow during the recovery.

Summary:

The headline monthly jobs number was below expectations, however the previous two months were revised up by 27,000 combined.  The headline unemployment rate decreased to 5.8%, but the participation rate declined slightly.

There are still 7.6 million fewer jobs than in February 2020, and 3.2 million people have lost jobs permanently.