Friday’s jobs report beat forecasts: 339,000 new jobs. Federal Reserve officials expected tensions in the job market to ease, but the new data shows a buoyant job market, more than a year after the central bank began its tightening campaign to slow the economy.
“This is not an economy that looks poised for recession,” said Bruce Kasman, chief economist and head of global economic research at JPMorgan Chase.
Those hoping for signs of easing pointed to a higher unemployment rate in May, up 0.3 percentage points to 3.7%, and 440,000 more unemployed.
But the proportion of the prime-age workforce who have a job or are looking for a job hit 83.3% in May, a 21-year high, according to data from the Bureau of Labor Statistics. Prime-age workers are people between the ages of 25 and 54.
Workers of almost all ages participated in the economy by keeping or looking for a job at the same or higher level than just before the pandemic. An exception was made for people over 75 years of age. Experts say this is most likely due to health concerns.
And the women have reached a new milestone. Participation among prime-age women workers in May reached its highest level on record, continuing a long-term trend towards more educated women and growth in industries employing many women.
“It’s a question of how many workers you can hire,” said Sarah House, chief economist at Wells Fargo, following Friday’s report.
One possible way to attract new workers could be to cope with the decades-long decline in the labor force participation of prime-age men, which fell from 94.2% in May 1980 to 89.2% in May this year, while their peers rose from 63.8 % to 77.5%.
Women’s labor force participation has increased because many of them are marrying later, having fewer children and being single have closer ties to the labor market, House said. And many of them have found jobs in the fast-growing healthcare sector.
Part of the difficulty in stimulating falling labor force participation among prime-age men is the decline of male-dominated industries like manufacturing, House said.
And that brings to light a darkening economic cloud: Manufacturers shed 2,000 jobs in May.
Timothy Fiore, who analyzes the Institute for Supply Management’s monthly manufacturer survey, said Thursday that factory managers were concerned the backlog had dried up. These arrears are at the level of 2009 at the time of the financial crisis. If orders don’t pick up, Fiore said there could be corporate restructuring, including staff cuts announced in the second-quarter earnings release.
“Right now the future is very bleak,” Fiore said of the manufacturers.
But with current prime-age employment rates at a decade-high, attracting new workers will not be easy, and demand for them could help keep the labor market tight.
Write to Bob Fernandez at [email protected]
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