US unemployment: six reasons May figures show a troubled recovery

http://www.guardian.co.uk/business/2012/jun/01/us-jobs-six-reasons-bad-news

Version 0 of 1.

1. The headline rate

The US economy added 69,000 jobs in May. The figure is awful all on its own. To cope with demographic shifts, the US needs to add more than 100,000 jobs a month just to hold steady. Three years into a "recovery", adding 69,000 jobs a month is truly depressing.

Between December and February, the economy added an average of 252,000 jobs each month. March (150,000) and April (115,000) numbers were not great, but OK. Until now...

2. Downward revisions

Perhaps the most depressing figures in May's jobs report actually belong to April. April's far from sparkly 115,000-strong jobs growth has now been revised down to 77,000. March's figures were cut from 154,000 to 143,000. In short, the present is weaker than expected and the past was worse than we thought.

3. Long-term unemployment

There are now 5.4 million people in the US who have been unemployed for 27 weeks or more, up from 5.1 million in April. The median duration of unemployment increased to 20.1 weeks from 19.4 weeks.

As we reported here, long-term unemployment is devastating for the people it affects, reducing not only their chances of finding work but their health and the future prospects of their children.

4. Construction decline

As this graph shows, construction has been hit hard in the US by the recession. Not only is the industry a big employer, it is also an indicator of the health of the broader economy. It's important not to read too much into one month's figures, but the loss of 28,000 construction jobs in May – when seasonal construction should be picking up – is not a good sign.

5. Public sector cuts

Economists including Paul Krugman like to point to Europe's woes and blame fiscal austerity for the region's lack of growth. But there's plenty of cost cutting going on at home too, especially at the local level.

Once again the government cut jobs in May – by 13,000 this time. And as the graph shows (and our story from yesterday illustrates) government jobs have been slashed throughout Obama's presidency.

6. The rise of part-time

Even for those with work there was little to cheer in the report. Average hourly earnings were up just 0.1% month on month or 1.7% year on year. That's not enough to keep up with inflation. The number of people employed part-time for economic reasons (also known as involuntary part-time workers) edged up to 8.1 million over the month.

The average workweek for all employees edged down by 0.1 hour<br />to 34.4 hours in May. So that's fewer people getting jobs for less money and fewer hours.