U.S. adds 280,000 jobs in May, easing some economic worries
Source: MARGOT ROOSEVELT
The U.S. economy added 280,000 jobs in May, the largest gain in five months, the government reported Friday, dispelling concerns over sluggish growth earlier this year.
The gain was well over the monthly average of 251,000 since May 2014.
“This is a good report,” said Robert Kleinhenz, chief economist of the Los Angeles Economic Development Corporation. “Despite the weak first quarter GDP reading, momentum in the economy is holding up.”
The official unemployment rate ticked up slightly to 5.5 percent from 5.4 percent, but that was because more people were looking for work, encouraged by an improving job market.
A year ago the nation’s jobless rate was at 6.3 percent.
Abel Saldana, 20, just got a part-time job at an Irvine Chick-Fil-A outlet. “I got lucky,” he said. “I needed something immediate to pay rent.”
A UCI English major, Saldana hopes to eventually land a professional position. He sees the job market as “getting better,” but he adds, “to get a job in a career-oriented field is still very competitive.”
In May, a broader measure of unemployment, which includes discouraged workers who have given up looking, as well as part-timers who want full-time jobs, remained at 10.8 percent, a sign that many Americans have yet to benefit from the recovery.
A positive indicator, however, was a sharp drop in the proportion of the jobless who have been out of work for more than six months. That number fell to 28.6 percent from 34.4 percent a year earlier. It had reached 45 percent at the peak of the recession.
Another favorable sign: the percentage of part-time workers dipped to 18.4 percent in May, from 18.7 percent in April. It now approaches the long-run average of 18 percent.
Workers under 25 years old, who suffered disproportionately during the recession, accounted for about three-quarters of net new hires in May, a seasonal blip after the school year. On an annual basis, they took 11.7 percent of new jobs, according to Matthew Insco, an economist with the U.S. Bureau of Labor Statistics.
“You can’t look at one month and say, ‘That’s good news,’” said Chapman University economist Esmael Adibi. “Over the long term, young people still have difficulty securing jobs, especially well paying jobs. They are competing with more experienced people.”
A report last month by the Economic Policy Institute, a Washington, D.C.-based think tank, noted that the unemployment and underemployment rates of young graduates remain far higher than before the recession.
The jobless rate is 7.2 percent for young college graduates and 19.5 percent for recent high school graduates. In 2007, those rates were 5.5 percent and 15.9 percent, respectively, EPI reported.
Workers with specialized skills are in demand, however. Janice Hawkins, 24, graduated from UCI in chemical engineering and, after working at a start-up, scored a job two years ago as a process engineer at Irvine-based Enevate Corporation, a battery company.
“Between now and three years ago, the job market has definitely improved,” she said. “But networking is becoming vital. You either need to know someone or you need to make friends.”
After years of stagnant earnings, the government had good news on wages last month. Average hourly earnings rose 0.3 percent, the biggest gain since January. They were up 2.3 percent from May 2014 �C higher than the two percent average gain since the current expansion began six years ago.
May’s employment gains were broad-based. Nearly all major sectors added jobs in May, compared both to the month before and to a year earlier.
Of the three million jobs added year-to-year, the largest gain was in professional and business services, which rose by 671,000 jobs or 3.5 percent.
Education and health added 592,000 jobs, a 2.8 percent year-to-year gain, boosted by the medical demands of an aging population and the expansion of health insurance under Obamacare.
Employment in the trade, transportation and utilities industries expanded by 563,000 jobs year-to-year, a 2.1 percent gain, much of which came in the retail sector.
“This is the best report of 2015,” said Labor Secretary Tom Perez. “The trends are beginning to resemble 2014, which had a, relatively speaking, slow start followed by real momentum.”
The United States economy shrank at a 0.7 percent annualized rate in the first quarter, according to the Commerce Department.
In recent weeks, some Federal Reserve officials have expressed concern over foreign headwinds which have pushed up the value of the dollar, undermining U.S. exports and suppressing domestic inflation.
Still, most Americans are increasingly optimistic, according to a Fed survey. Challenges remain: Nearly half of those surveyed said they had to skip some medical care for lack of money, and couldn’t cover an unexpected emergency that cost $400.
However, economists said the return of stronger job growth is likely to strengthen the Fed’s resolve to start raising interest rates from their near-zero level later this year.
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