The Bureau of Labor Statistics (BLS) May jobs report showed disappointing job gains and steadily rising wages. At just 75,000, the number of jobs added in May was well below economists’ predictions of 180,000.
In addition, the job gains in both March and April were revised down from 189,000 to 153,000 and 263,000 to 224,000, respectively. These numbers are in line with what we were expecting at ZipRecruiter, based on a 6% decline in job posting volumes in April and a 1% decline in May.
Interestingly, the private sector created 90,000 new jobs, whereas the government actually lost 15,000 jobs. Observers were expecting to see a surge in government job growth due to the hiring of Census workers, but census hiring appears to be happening much later than usual.
- Wage Growth Held Steady, Remaining Above 3% for the Tenth Straight Month
ZipRecruiter data suggest that wage growth will remain above 3% for the foreseeable future. Employers are not required to provide compensation ranges when they post job openings on our platform, but about 40% do. As of May 2019, the average low end of posted salary ranges had risen 3.26% and the average top end had risen 4.04%, year over year. That suggests job switchers will see a nice wage boost, and new labor market entrants will get off to a strong start.
- Prime-Age Labor Force Participation Continues to Fall
After steadily rising since 2011, the prime-age labor-force participation rate peaked in January at 82.6% but has been falling for the past few months and is now just 82.1%. It’s increasingly looking as though we may have exhausted the supply of workers on the sidelines looking to reenter the workforce.
- Part-time for economic reasons
Encouragingly, however, the number of workers working part-time for economic reasons declined in May after rising in March and April. Along with historically low jobless claims, the decline in the number of involuntary part-time workers is good news–a sign that unemployment and underemployment remain low.
- Agriculture and Manufacturing Show Their Vulnerability
The most vulnerable U.S. industry at the moment is agriculture, which has been the hardest hit by recent trade disputes and falling commodity prices. The monthly jobs report will have nothing to say about agricultural employment because farm jobs are generally exempt from unemployment insurance requirements and therefore not tracked by the BLS. But ZipRecruiter data suggest agricultural job posting are 14% lower so far in 2019 than they were last year.
U.S. manufacturers, particularly automobile manufacturers, are also vulnerable to the escalating trade disputes. After solid gains in manufacturing employment in 2018, we have now seen very sluggish growth so far in 2019. Only 3,000 new manufacturing jobs were created in May, compared with an average of 22,000 each month in 2018. Uncertainties and supply chain disruptions caused by recent trade disputes, paired with slowdowns in orders from abroad, are the likely culprits.