The May jobs report today again disappointed economists’ expectations, adding just 559,000 jobs versus the consensus estimate of 671,000 jobs.
“May’s letdown came after April sharply undershot expectations,” says CNBC, “with the upwardly revised 278,000 [April jobs number] still well short of the initial 1 million estimate that came with high hopes for an economy trying to shake loose its pandemic shackles.”
Some critics of the administration were quick to point to the report as further proof that the Biden economic policies are slowing a robust economic recovery that began a year ago under President Donald Trump, when the economy created a record 4.8 million jobs in June.
“May marks another month of disappointing job growth brought on by this Administration’s socialist driven spending policies,” said US Sen. Roger Marshall, R-Kansas, after the report was released. “Not only are these policies driving up inflation but they have also created lucrative government dependency that makes it more beneficial to stay unemployed rather than return to work.”
By contrast, unemployment trended down again, coming in at 5.8% versus expectations of 5.9%, that, after April’s print of 6.1%
The brightening unemployment picture comes after GOP-led states canceled enhanced unemployment benefits, forcing jobless to look for work or lose unemployment pay.
The resulting downturn in unemployment will further fuel debate about the Biden economic plan and whether it is helping or hurting the economy.
The Republican National Congressional Committee also criticized the administration in wake of the report.
“The problem isn’t a lack of jobs,” said RNCC spokesman Mark Berg, “It’s Democrats’ $1.9 trillion socialist giveaway that’s creating a labor shortage throughout the country. A record-high number of U.S. small businesses can’t fill job openings because Democrats’ bill incentivized people to remain unemployed.”
An alternate measure of unemployment that measures discouraged and part-time workers who can’t find full-time work remains stubbornly high at 10.2%, even as the Bureau of Labor Statistics reported 8.1 million available jobs last month.
Becky Frankiewicz, president of the temporary staffing firm Manpower Group’s North American division, said many of the firm’s clients are raising pay and benefits to try to attract more applicants.
Average wages for non-farm workers rose in May 15 cents after increasing in April by 21 cents. The increase will further fuel inflation worries by the Federal Reserve Bank. Gas and lumber prices drove last month’s inflation numbers to distraction levels.
If wages continue to rise it may be further evidence that “rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages,” according to the government jobs report.
Biden’s Secretary of Labor, Marty Walsh, warned people before the jobs report was issued not to read too much into one or two reports, perhaps a sign the administration knew the report would disappoint.
“Restarting, getting people back to work, is like a big engine, trying to get it revved up,” Walsh said. “We’d love to see it come back overnight, but unfortunately that’s not how it works.”
Service industries, including banking, retail, and shipping, expanded at the fastest pace on record in May.
The evidence suggests that consumers have begun to embark on a long-anticipated shift away from the sizable goods purchases that many of them had made while hunkered down at home to spending on services, from haircuts to sporting events to vacation trips.