Economy Watch: Job Creation Stalls in May
- Jun 03, 2016
The economy created a net of only 38,000 jobs in May, with a number of downward pressures on employment coming to the fore, especially the drop in energy employment (a longer-term factor) and the Verizon strike (a shorter-term factor), according to the Bureau of Labor Statistics on Friday. The separate survey that determines the headline unemployment rate dropped it to 4.7 percent.
Healthcare was essentially the only industry that added a significant number of jobs during the month, up 46,000 in May, with increases in ambulatory healthcare services, hospitals and nursing care facilities. That industry has tended to see employment growth regardless of what the rest of the economy is doing, which drives demand for healthcare space. Over the year, healthcare employment has increased by 487,000 positions.
Employment in professional and business services changed little in May (up 10,000), after increasing by 55,000 in April. Within the industry, professional and technical services added 26,000 jobs for the month, in line with average gains over the prior 12 months. This sector of the economy tends to drive demand for office space.
The change in total payroll employment for March was revised from a gain of 208,000 to 186,000, while the change for April was revised from a gain of 160,000 to 123,000. With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past three months, job gains have averaged 116,000 per month. The relative weakness of the employment market this year might cause the Fed not raise interest rates this month, after all.