The U.S. Treasury Department commented on May's anemic job growth rate Friday morning, admitting the numbers were "clearly below expectations" while cautioning reporters not to read too much into monthly numbers.
"The labor market report that was released earlier this morning indicated that employment rose less than expected," Assistant Secretary for Economic Policy Jan Eberly told reporters this morning. "Although private employers continued to add jobs at a modest pace in May."
The economy added a net of just 69,000 new jobs in May, far lower than the 150,000 most economists expected. The unemployment rate also rose 0.1 percent to 8.2 percent in May, rising back to its March level.
Additionally, the April job creation numbers, already considered weak compared with March's, were revised down sharply to show a gain of just 77,000 jobs. This was 38,000 fewer than the 115,000 initially reported.
"Mostly employment and unemployment figures can be volatile...It is therefore important to not read too much into a single monthly report," Eberly cautioned reporters.
She attributed these numbers largely to the difficulty in timing the Easter holiday and the unseasonably warm winter this year, which effect particular sectors of the data, such a construction numbers, more heavily.
"There was strong growth in construction employment in December and January. So it was over 44,000 for both months combined. So the weakness now may reflect some payback for the strength that we saw in December. You see a similar pattern in other weather sensitive sectors," Eberly said.
The recovery is coming against the backdrop of a financial crisis overseas, Eberly said, which could account for some of the low numbers seen for May.
"Looking beyond the labor market, other indicators of economic activity for May have been mixed. But on balance incoming data remain consistent with the economy expanding at a moderate pace," Eberly added.
9,000 temporary help worker jobs were added in May. The administration often uses these numbers as a broader indication of job growth.
When asked by RTTNews where these numbers could go in the future, Eberly said growth in temporary work was a positive sign.
"Even though the overall job growth is lower this month than it has been in the past, we continue to see hiring into the temporary help sector. And so it continues to be a sign of growth which we always emphasize is modest economic growth at this point in the recovery."
Although jobs were added to the private sector for the 27th straight month, Eberly said, government employment dropped 13,000 in May and 10,000 in April. Among these losses, 7,000, or around half, were in the state and local education sector.
One of the Obama administration's policy proposal priorities that encourages the hiring of teachers and first responders is "critical" for short term employment numbers and also for the education of future generations of Americans, Eberly said.
Although unemployment is up, Eberly added a drop 3/4 of a percent drop in U4 unemployment numbers show "fewer people are dropping out of the labor force." U4, or "discouraged," workers are those who have stopped looking for work because current economic conditions make them believe that no work is available for them. It currently stands at 8.7 percent.
However, 3.4 people were unemployed in May compared with every job opening, nearly double the pre-recession rate of 2/1. Over five million people were also considered long-term unemployed workers, also nearly double the pre-2008 numbers.
Aside from the Obama administration's policies of increasing infrastructure and education jobs and helping to ensure people capable of paying their mortgage are doing so and creating a Veterans Jobs Corps, Eberly said continued work with the Europeans to address their crisis and furthering lowering of gas prices will ease fears and continue to grow consumer confidence in the months ahead.
"[Consumers] are giving positive answers to [the Michigan Sentiment Index]," Eberly said, adding the Institute for Supply Management (ISM) Index was down slightly but still exhibiting strength in new orders.
"Those are all forward looking indications...There's some mixed data coming in so it's hard to give you a really sharp forecast. But that's always the case. There's always volatility around these numbers."
by RTT Staff Writer
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