America’s surging economy added another 223,000 jobs last month, knocking the employment rate down to 3.8 percent — the lowest in a half-century, the government reported Friday.
The Department of Labor also revised upward the combined job totals for March and April, determining that 15,000 more people got jobs than initially estimated.
President Donald Trump hinted at good news with a tweet Friday morning indicating that he was looking forward to seeing the report. The tweet prompted a cacophony of complaints that the president violated a rule prohibiting federal employees from commenting on the jobs report until an hour after its release.
It was hard for people to complain about the substance, though.
The left-leaning Economic Policy Institute pronounced the May report “solid.” Elise Gould, a senior economist at the think tank, wrote on its website that the May numbers were more encouraging than in April, when the unemployment rate dropped below 4 percent for the “wrong” reasons — because people were dropping out of the workforce.
“Meanwhile, in May, more people found jobs at the same time that the labor force participation rate ticked down slightly,” she wrote. “About two-thirds of the drop in the unemployment rate in May was because workers found jobs, while about one-third of the drop was from people leaving the labor force.”
Along with the increase in jobs, the Labor Department reported that average hourly wages increased 2.7 percent from May 2017. Gould wrote that is an indication that, notwithstanding the low unemployment rate, there remains a large number of people on the sidelines who are not counted in the official number.
“In a full employment economy, we would see wages rising much faster — closer to 3.5 percent and above — to claw back the losses to labor share in the aftermath of the Great Recession,” she wrote.
Retail trade led the way in May, with 31,000 new jobs in that sector. Health care also was a strong jobs producer, with a net of 29,000 newly created jobs. Construction (25,000) and manufacturing (18,000) also posted gains. The manufacturing sector has seen a net increase of 259,000 jobs over the past 12 months.
Even mining, which was on the ropes a couple of years ago, has begun to recover. It added 6,000 jobs in May, and employment has grown by 91,000 since hitting an all-time low in October 2016.
“There’s no doubt that the pace of manufacturing employment has picked up during the Trump administration,” said Alan Tonelson, an economic policy analyst who focuses on trends in the industrial sector.
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“This does seem to be a sign that regulatory relief has had some effect and, perhaps, it’s possible tax cuts are starting to have an effect, too,” he added.
But Tonelson, who blogs on the economy at RealityChek, sounded a note of caution about the 18,000 manufacturing jobs created in May. That is the lowest monthly total since 6,000 in September.
What’s more, he added, manufacturing wages basically flatlined from April to May and have lagged far beyond overall private sector gains over the past year.
Tonelson said it is important not to make too much of any single monthly report. He added nevertheless that it bears watching.
“I’m not entirely sure what to make of this,” he said.
PoliZette senior writer Brendan Kirby can be reached at [email protected]. Follow him on Twitter.
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