The labor market softened in recent months, with May representing the weakest job growth in nearly six years, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Job growth in the national economy slowed abruptly in May, according to preliminary figures released today by the Bureau of Labor Statistics. The economy added a net 38,000 jobs on a seasonally-adjusted basis in May, which represented the weakest monthly increase since September 2010.
The story was equally poor in the nation’s private sector, which saw payrolls expand by just 25,000 in May. This was the worst performance since February 2010, which was the last month of job losses during the Great Recession.
Even adding in the 35,000 jobs that weren’t counted because of the Verizon strike, the private sector’s job growth in May would still have been the weakest gain since January 2011.
Trends were mixed on an industry level, as would be expected with a weak topline number. The health care and social assistance sector led the way with an increase of 55,000 jobs in May, while eating and drinking places added just over 22,000 jobs. Retailers added a net 11,000 jobs in May, while the professional and business services sector added 10,000 jobs.
On the flip side, construction firms shed 15,000 jobs in May, while wholesalers, manufacturers and miners all cut 10,000 jobs.
Although the unemployment rate dropped from 5.0 percent in April to 4.7 percent in May – the lowest jobless rate since November 2007 – it was due mostly to a sharp reduction in the labor force. The labor force contracted by 458,000 in May, which brought the labor force participation rate back down to 62.6 percent – the lowest level since December.
While one extremely weak month can sometimes be overlooked as an outlier, downward revisions to the March and April figures suggest that the labor market is in the midst of a softening trend. May represented the third consecutive month of slowing job growth, and the most recent three-month average increase of 116,000 jobs was the weakest in nearly four years.