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Is this a bump in the road? Or a sign of real trouble ahead?
Jobs
Hiring Really Is Slowing Down
By Ben Casselman
There is no longer any doubt about it: Job growth is slowing.
U.S. employers added 38,000 jobs in May, the Bureau of Labor Statistics said Friday. That’s far short of economists’ expectations and marks the worst month for hiring since the jobs recovery began in earnest in 2010. The government also revised down its estimate for job growth in March and April by a combined 59,000 jobs. Altogether, the U.S. has added an average of 116,000 jobs per month over the past three months, down from 203,000 jobs per month during the same period last year.
Friday’s numbers probably overstate the extent of the slowdown. For one thing, a month-and-a-half-long strike among Verizon workers temporarily removed 35,000 workers from U.S. payrolls. (The strike ended this week, so the workers will be counted again in next month’s jobs report.) Moreover, it’s always dangerous to read too much into one month’s report. Job growth experienced similarly steep one-month dips at several points over the past five years but quickly rebounded each time.
But even if May proves to be a blip, there’s no question that the overall trend in job growth has slowed markedly this year. Employers have added 2.4 million jobs over the past 12 months, down from the 3 million jobs that were added during the 12 months ending in April 2015. Other trends, such as a slowdown in temporary hiring and a recent spate of downward revisions (the BLS has revised down its initial estimate for hiring in each of the past three months), also point to a cooling job market.
The question, then, is what to make of the slowdown. There are two competing interpretations. The first is that this is an inevitable and even desirable consequence of an economy nearing full employment. The unemployment rate dropped to 4.7 percent in May, the lowest it has been since before the recession began more than eight years ago. That means there are fewer workers available to hire, so companies can’t add jobs as easily. Instead, they must either raise wages or hire people they otherwise wouldn’t consider — both good things for the economy as a whole.
The second interpretation is much less rosy: Job growth is slowing because the whole economy is slowing. That wouldn’t be too surprising: The current economic expansion is already one of the longest since World War II, and the U.S. has been a rare bright spot in a gloomy global economy. There have been other signs that the U.S. economy could be in trouble: Gross domestic product grew at a less than 1 percent rate in the first three months of the year, and economists are increasingly concerned about the possibility of a recession. That raises the troubling prospect that the clock could run out on the recovery before workers have seen much improvement in their paychecks. . . . .
JobsHiring Really Is Slowing Down
By Ben Casselman
There is no longer any doubt about it: Job growth is slowing.
U.S. employers added 38,000 jobs in May, the Bureau of Labor Statistics said Friday. That’s far short of economists’ expectations and marks the worst month for hiring since the jobs recovery began in earnest in 2010. The government also revised down its estimate for job growth in March and April by a combined 59,000 jobs. Altogether, the U.S. has added an average of 116,000 jobs per month over the past three months, down from 203,000 jobs per month during the same period last year.
Friday’s numbers probably overstate the extent of the slowdown. For one thing, a month-and-a-half-long strike among Verizon workers temporarily removed 35,000 workers from U.S. payrolls. (The strike ended this week, so the workers will be counted again in next month’s jobs report.) Moreover, it’s always dangerous to read too much into one month’s report. Job growth experienced similarly steep one-month dips at several points over the past five years but quickly rebounded each time.
The question, then, is what to make of the slowdown. There are two competing interpretations. The first is that this is an inevitable and even desirable consequence of an economy nearing full employment. The unemployment rate dropped to 4.7 percent in May, the lowest it has been since before the recession began more than eight years ago. That means there are fewer workers available to hire, so companies can’t add jobs as easily. Instead, they must either raise wages or hire people they otherwise wouldn’t consider — both good things for the economy as a whole.
The second interpretation is much less rosy: Job growth is slowing because the whole economy is slowing. That wouldn’t be too surprising: The current economic expansion is already one of the longest since World War II, and the U.S. has been a rare bright spot in a gloomy global economy. There have been other signs that the U.S. economy could be in trouble: Gross domestic product grew at a less than 1 percent rate in the first three months of the year, and economists are increasingly concerned about the possibility of a recession. That raises the troubling prospect that the clock could run out on the recovery before workers have seen much improvement in their paychecks. . . . .