Unemployed veterans search for work at a job fair in Utica, N.Y., last month. Photo by Spencer Platt/Getty Images.
Uh — not so good. Not so good at all. That’s the verdict for Friday’s unemployment numbers. Not only did employers report a measly addition to payrolls — 69,000 net new jobs — but 220,000 more Americans told survey takers that they were unemployed: They had looked for work in the past week but couldn’t find even an hour’s worth.
The only reason the headline unemployment number — “U-3” — didn’t fall is that 422,000 more Americans also reported having jobs. How can this be? Because 642,000 more of us were in the “civilian labor force” in May than in April. Most of them seem to be people who weren’t looking for a job in the recent past, but now once again are.
Don’t take the actual numbers too seriously. They are extrapolated from samples and statistically adjusted. Plus, they represent just one month’s data. But looking at the revisions made to the March and April job totals (a more reliable measure of trends) suggests an economy slowing — from an already sluggish pace. The downward revision of 49,000 jobs over those two months almost matches May’s supposed increase of 69,000. And who knows how much that number may change when revised in July?
The medley of melancholy news includes the construction industry, especially hard hit, which augurs continued housing stagnation. The number of long-term unemployed (out of work for half-a-year or more) rose to 5.4 million. Average work week down. Average hourly earnings up at a 1.7 percent annual rate, not enough to keep pace with inflation (2.6 percent).
And finally, our monthly U-7 statistic, the most inclusive reckoning of those who say they want a full-time job but can’t find one, rose to 16.91 percent, up substantially from 16.62 percent last month. That’s 27.1 million Americans, up nearly half-a-million from last month.
If you think we’re downbeat here on Making Sen$e, listen to what others are saying Friday morning:
The New York Times: “a showing that reflected mounting fears of a global slowdown.”
The Wall Street Journal: “well below expectations in a further indication the economy has lost momentum.”
Financial Times: “US reports feeble jobs growth for May.”
Bloomberg: “American employers in May added the smallest number of workers in a year and the unemployment rate unexpectedly increased as job-seekers re-entered the workforce, further evidence that the labor-market recovery is stalling.”
The most telling datum of all may be the one that I (and, it turns out, Paul Krugman) consult numerous times a day: the U.S. 10-year interest rate. It has plunged below 1.5 percent as of Friday morning. Given that inflation has been running at 2.6 percent and it has to be worth something to borrow money, investors are stampeding to safety by purchasing safe U.S. government bonds at what will almost surely be a loss over 10 years — and is there no possibility at all of debt default? The 10-year interest rate is an emphatic vote of no-confidence in economic growth, and the U.S. is not alone.
Historically low 10-year rates in Germany, as I write (1.15 percent), the U.K. (1.48), Sweden (1.16), Japan (.82) or Switzerland (.45), suggest a deflationary world: lower sales, lower prices (oil is plummeting Friday morning), lower profits and even more unemployment.