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Friday, June 04, 2010

Good news on the employment front--or not?

According to the BLS Employment Situation report for May, the economy added 431,000 jobs, compared with April. That's the good news.

390,000 of those were new government jobs.

So the first part of the not-so-good news is that we got only 41,000 new private sector jobs.

412,000 of the new government jobs were temporary jobs associated with the 2010 Census.

So the second part of the not-so-good news is that, absent hiring for the Census, there were 22,000 fewer government jobs. And all of that was at the state and local level. State government employment fell by 15,000 and local government employment fell by 7,000. Over the past year, state government employment fell by 32,000, while local government employment is down by 158,000. Ignoring the temporary Census jobs, federal government employment over the last year is up by only 120,000. Net, government employment is down by 70,000.

What about the 41,000 new private-sector jobs? To begin with, that's not very many new jobs, so that's not very good news.

Second--31,000 of those new jobs are in "temporary help services." That shouldn't make us too excited.

Third, construction employment fell by 35,000 jobs and is now at its lowest level since August 1996. Since peaking at 7.7 million jobs in January 2007, construction employment has declined by about 2.2 million.

In the household report, we observe, again, some good news--the unemployment rate fell modestly, to 9.7--and some not-so-good-news. The labor force fell by 322, up nearly half of the 800,000 gain in labor force articipation registered in April. Employment, measured in the household survey, fell by 35,000. So the entire reduction un unemployment came from a shrinking labor force.

And, perhaps most distressing, 45% of the unemployed have now been out of work for 27 or more weeks--by far the largest concentration of unemployment among the long-term unemployed since the beginning of the Current Population Survey in 1948.

Damn, I was hoping for another really good employment report.


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