June 04, 2015
The Labor Department reported that the economy added 280,000 jobs in May. With modest upward revisions to the prior two months’ data, this brings the average over the last three months to 207,000. Almost all the job growth was on the service side as a drop of 18,000 jobs in mining largely offset a rise of 17,000 in construction and an increase of 7,000 jobs in manufacturing.
Employment in the manufacturing sector has been hit by the rise in the trade deficit due to the strong dollar. The index of weekly hours in the sector is down by 0.6 percent from its January level.
The big gainers in May were health care, which added 46,800 jobs, retail with 31,400, and arts, entertainment and recreation, which added 29,000 for a gain of 1.4 percent. The last is almost certainly an anomaly that will be reversed. In prior years, gains of this size were almost always followed by declines in the next month.
The household survey showed a mixed picture. More people entered the labor market, but this was associated with a small increase in the number of unemployed, causing the unemployment rate to edge up to 5.5 percent. On the positive side, the employment to population ratio rose to 59.4 percent, its highest level in the recovery.
