Economy

Google Ad

The US in May added 559K non-farm payrolls jobs less than forecasted 674k new jobs, April prev 266k was rrevised to 278k. The unemployment rate fell to 5.8% from 6.1%. US Average Hourly Earnings (M/M) were higher by 0.5% (est 0.2%; prevR 0.7%; prev 0.7%)

Working

May 2021 U.S. Employment Report

The Covid-19 virus wreaked havoc on the global economy. The world's economy was shut down and much of America has stay at home orders. Jobless claims numbers have been improving after records and unfortunately the story is much worse as people have not all been able to return to work.

The May through November reports however were a surprise gain in jobs. The expectation had been for more recovery in job losses for December until new lockdowns came into affect and we saw a loss of 140,000 jobs. We rebounded Jan somewhat with 49,000 new jobs and an upwardly revised 468K in February. The US economy added 916K jobs in March of 2021, the strongest employment growth in 7 months, with the largest gains occurring in leisure and hospitality, public and private education, and construction. However the March number was revised lower in April to 770k from 916k. In May we saw 559K non-farm payrolls jobs, less than forecasted 674k new jobs, April prev 266k was revised to 278k.

 US Jobs May 2021

The market had expected the May report released Friday to show nonfarm payrolls rise 674k new jobs which it missed with 559k new jobs with a sputtering economy.  The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 5.8%.

United States Non Farm Payrolls 

May 2021 US Employment Report & Expectations

Employment:

  • Non-farm payrolls  +559,000 vs +674,000 expected, Prior +266,000 (revised to 278,000)
  • Unemployment rate  5.8% (est 5.9%; prev 6.1%)
  • Participation rate 61.6% (est 61.8%; prev 61.7%)(63.3% highest since 2014)
  • Underemployment rate  10.2% (prev 10.4%)
  • Two month net revision  +27K Prior -78 +158 -159 k +11k +15k, +145k
  • Manufacturing payrolls 23K (est 25K; prevR -32K; prev -18K)
  • Private payrolls  +492K vs +610K expected prev 780k
  • Long-term unemployed at 3.8m vs 4.2m prev
  • The employment-population ratio58.0% vs 57.9% prev (61% before pandemic)

 United States Unemployment Rate

Wages:

  • Average hourly earnings 0.5% (est 0.2%; prevR 0.7%; prev 0.7%)
  • Average hourly earnings 2.0% (est 1.6%; prevR 0.4%; prev0.3%)
  • Average weekly hours All Employees: 34.9 (est 34.9; prevR 34.9; prev 35.0)

United States Average Hourly Earnings

In May Average hourly earnings for all employees on private nonfarm payrolls increased by 15 cents, or 0.5% to $30.33 in May of 2021, following a 0.7% increase in April and beating market estimates of a 0.2% gain. '

Average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.60 in May, following an increase of 19 cents in April. Year-on-year, average hourly earnings have increased by 2%, following an upwardly revised 0.4% rise and above market consensus of a 1.6% increase. The data for the last 2 months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. Source: U.S. Bureau of Labor Statistics

In March US saw first decrease in average hourly earnings since June last year despite the big gain in jobs for all employees on US private nonfarm payrolls - Average hourly earnings fell 4 cents to $29.96 or -0.1% m/m v 0.1% Expected +0.3% m/m Prior

 

Household Survey Data

 In May, the unemployment rate declined by 0.3 percentage point to 5.8 percent, and the number of unemployed persons fell by 496,000 to 9.3 million. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020). on page 5 for more information about how the household survey and its measures were affected by the coronavirus pandemic.) Among the major worker groups, the unemployment rates declined in May for teenagers (9.6 percent), Whites (5.1 percent), and Hispanics (7.3 percent). The jobless rates for adult men (5.9 percent), adult women (5.4 percent), Blacks (9.1 percent), and Asians (5.5 percent) showed little change in May.

 Among the unemployed, the number of persons on temporary layoff declined by 291,000 to 1.8 million in May. This measure is down considerably from the recent high of 18.0 million in April 2020 but is 1.1 million higher than in February 2020. The number of permanent job losers decreased by 295,000 to 3.2 million in May but is 1.9 million higher than in February 2020. (See table A-11.) In May, the number of persons jobless less than 5 weeks declined by 391,000 to 2.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 431,000 to 3.8 million in May but is 2.6 million higher than in February 2020. These long-term unemployed accounted for 40.9 percent of the total unemployed in May. 

The labor force participation rate was little changed at 61.6 percent in May and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.7 percentage points lower than in February 2020. The employment-population ratio, at 58.0 percent, was also little changed in May but is up by 0.6 percentage point since December 2020. However, this measure is 3.1 percentage points below its February 2020 level.  

The number of persons employed part time for economic reasons was essentially unchanged at 5.3 million in May but is 873,000 higher than in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.  

In May, the number of persons not in the labor force who currently want a job was essentially unchanged over the month at 6.6 million but is up by 1.6 million since February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.  

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 2.0 million, changed little in May but is up by 518,000 since February 2020. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 600,000 in May, little changed from the previous month but 199,000 higher than in February 2020.

 

Household Survey Supplemental Data

 In May, 16.6 percent of employed persons teleworked because of the coronavirus pandemic, down from 18.3 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.-3- In May, 7.9 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is down from 9.4 million in the previous month. Among those who reported in May that they were unable to work because of pandemic-related closures or lost business, 9.3 percent received at least some pay from their employer for the hours not worked, unchanged from the previous month.  

Among those not in the labor force in May, 2.5 million persons were prevented from looking for work due to the pandemic. This measure is down from 2.8 million the month before. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.) These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment increased by 559,000 in May, following increases of 278,000 in April and 785,000 in March. In May, nonfarm payroll employment is down by 7.6 million, or 5.0 percent, from its pre-pandemic level in February 2020. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance in May. 

In May, employment in leisure and hospitality increased by 292,000, as pandemic-related restrictions continued to ease in some parts of the country. Nearly two-thirds of the increase was in food services and drinking places (+186,000). Employment also rose in amusements, gambling, and recreation (+58,000) and in accommodation (+35,000). Employment in leisure and hospitality is down by 2.5 million, or 15.0 percent, from its level in February 2020.

 In May, employment increased in public and private education, reflecting the continued resumption of in-person learning and other school-related activities in some parts of the country. Employment rose by 53,000 in local government education, by 50,000 in state government education, and by 41,000 in private education. However, employment is down from February 2020 levels in local government education (-556,000), state government education (-244,000), and private education (-293,000). Health care and social assistance added 46,000 jobs in May. Employment in health care continued to trend up (+23,000), reflecting a gain in ambulatory health care services (+22,000). Social assistance added 23,000 jobs over the month, largely in child day care services (+18,000). Compared with February 2020, employment is down by 508,000 in health care and by 257,000 in social assistance. Employment in information rose by 29,000 over the month but is down by 193,000 since February 2020. In May, job gains occurred in motion picture and sound recording industries (+14,000). Manufacturing employment rose by 23,000 in May. A job gain in motor vehicles and parts (+25,000) followed a loss in April (-38,000). Employment in manufacturing is down by 509,000 from its level in February 2020.  

Transportation and warehousing added 23,000 jobs in May. Employment increased in support activities for transportation (+10,000) and in air transportation (+9,000). Since February 2020, employment in transportation and warehousing is down by 100,000. Employment in wholesale trade increased by 20,000 in May, mostly in the durable goods component (+14,000). Employment in wholesale trade is down by 211,000 since February 2020. Construction employment edged down in May (-20,000), reflecting a job loss in nonresidential specialty trade contractors (-17,000). Employment in construction is 225,000 lower than in February 2020.  

Employment in professional and business services changed little in May (+35,000). Within the industry, employment continued to trend up in accounting and bookkeeping services (+14,000). Employment in temporary help services changed little over the month (+4,000), following a large decline in April (-116,000). Overall, employment in professional and business services is down by 708,000 since February 2020.  

Employment in retail trade changed little in May (-6,000). Clothing and clothing accessories stores added 11,000 jobs. Employment in food and beverage stores decreased by 26,000, following a decline of 47,000 in April. Employment in retail trade is 411,000 below its February 2020 level. In May, employment changed little in other major industries, including mining, financial activities, and other services.  

Average hourly earnings for all employees on private nonfarm payrolls increased by 15 cents to $30.33 in May, following an increase of 21 cents in April. Average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.60 in May, following an increase of 19 cents in April. The data for the last 2 months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings. (See tables B-3 and B-8.) In May, the average workweek for all employees on private nonfarm payrolls was 34.9 hours for the third month in a row. In manufacturing, the average workweek rose by 0.1 hour to 40.5 hours, and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 34.3 hours.  

The change in total nonfarm payroll employment for March was revised up by 15,000, from +770,000 to +785,000, and the change for April was revised up by 12,000, from +266,000 to +278,000. With these revisions, employment in March and April combined is 27,000 higher than previously reported. (Monthly revisions result from additional  reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

The Employment Situation for June is scheduled to be released on Friday, July 2, 2021, at 8:30 a.m. (ET).

May 2021 ADP U.S. Employment Report

 The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic. 

Interestingly ADP’s stronger-than-expected 978,200 jobs added in May (versus estimates of 650k), the strongest showing since June 2020. ADP reported a booming 850,000 Service-Provider jobs added. Curiously, ADP reported 65,000 new construction jobs, in contrast to Friday’s Department of Labor report posting a 20,000 decline. ADP had 128,000 Goods Producing jobs added, versus the Labor Department’s 3,000. Moreover, ADP reported pervasive strong employment gains at small, medium and large companies.

“Private payrolls showed a marked improvement from recent months and the strongest gain since the early days of the recovery,” said Nela Richardson, chief economist at ADP.

  • The ADP figures showed a boom in leisure and hospitality jobs. In a continuing recovery for the industry hurt most by the government-induced lockdowns, the sector added 440,000 new jobs for the month.
  • Education and health services added 139,000, though most came from health care, while trade, transportation and utilities contributed 118,000.
  • Professional and business services saw 68,000 new hires while the other services category had 69,000
  • On the goods-producing side, construction payrolls increased by 65,000 while manufacturing added 52,000.
  • Overall, services were responsible for 850,000 jobs and goods-producing made up the balance of 128,000. 
  • Job gains were distributed almost perfectly even by company size, with medium-sized businesses of 50-499 employees contributing 338,000. Small firms hired 338,000 and large companies had 308,000.

“Companies of all sizes experienced an uptick in job growth, reflecting the improving nature of the pandemic and economy,” Richardson said. 

United States ADP Employment Change

Source: Automatic Data Processing, Inc

Jobless Claims for the week ending May 29th 2021

Examining weekly jobless claims data, applications for unemployment benefits dropped to 385,000, the lowest level since March 2020. Weekly Initial Jobless Claims averaged 940,000 over the past year.  Falling below the 400 thousand mark for the first time since March 2020, when the pandemic hit the economy. The reading came in also below market expectations of 390k as a steady decline in the number of daily coronavirus cases due to vaccinations allowed the country to continue its re-opening efforts and prompted businesses to hire more workers to respond to growing demand.

United States Initial Jobless Claims

In addition, many states recently decided to withdraw from federal unemployment benefit programs, following reports that it has been more difficult to hire as the benefits pay more than most minimum wage jobs. source: U.S. Department of Labor

The 4-week moving average of US jobless claims, which removes week-to-week volatility, fell to 428.0 thousand in the week ending May 29th, from 458.5 thousand in the previous period. It was the lowest level since March 2020, when the pandemic first hit the US labor market.

ontinuing jobless claims in the US, which measure unemployed people who have been receiving unemployment benefits for a while, rose to a ten-week high of 3.77 million in the week ending May 22nd, from a revised 3.60 million a week before and above market expectations of 3.615 million

United States Continuing Jobless Claims

Challenger, Gray & Christmas May Job Cuts Report

  • US-based companies announced 24,586 job cuts in May of 2021, slightly more than a 21-year low of 22,913 hit in April, with the most redundancies reported in health care/products (2,775) and education (2,617) including early childhood education.
  • Job cuts were down 93.8% from May 2020, when employers announced 397,016 cuts.
  • So far this year, employers have announced plans to cut 192,185 jobs, down 86% from the 1,414,828 through the same period last year.

"Many employers, especially those hit hard during the pandemic, such as Retailers and Hospitality and Leisure companies, are having a difficult time finding workers. Many are offering signing bonuses or higher wages to attract workers” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. source: Challenger, Gray and Christmas, Inc.

  • Source: Challenger, Gray and Christmas, Inc.

United States Challenger Job Cuts

  

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

 

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

Log in to comment
Discuss this article in the forums (1 replies).