Podcast: The May Employment Report and What It Means For the Economy
I’m Michelle Bazie and I’m joined by Chad Stone, the Center’s Chief Economist to discuss employment report for May.
1. Chad, the employment report was released this morning for May. What does it show?
At first blush, the numbers look good: the unemployment rate fell and 431,000 jobs were created. But when you dig a little deeper the results are more troubling.
2. How so?
Let’s start with unemployment. Today’s report shows that the unemployment rate dropped back to 9.7 percent in May, the rate it’s been for most of this year. The problem is that the dip in unemployment largely reflects people leaving the labor force (or not coming in in the first place); it doesn’t reflect an increase in the number of people with a job or people being optimistic about being able to find a job. The real message of today’s report is that unemployment is still very high, and jobs are still hard to find.
3. But didn’t the report also say that over 400,000 jobs were created?
It did. Private and government employers added 431,000 jobs to their payrolls. BUT, 411,000 of those jobs came from the temporary government hiring for the census. It’s disappointing that private-sector payrolls rose by just 41,000 jobs – that’s still a gain but it represents weaker progress than we expected to see and a sign that the economic recovery could use a boost.
4. Where will that boost come from?
Based on current forecasts of relatively weak economic growth for the rest of the year it doesn’t look like the private sector alone will provide it. Congress needs to pass a robust jobs bill that would provide additional unemployment insurance benefits and subsidized COBRA health insurance coverage for unemployed workers. In addition, more aid to help states deal with their bleak budget situations will do a lot to help the recovery gather steam and create more jobs.
5. What are the next steps to get the jobs bill on track?
Well, the House failed to include state fiscal relief and COBRA in the jobs bill that it just passed. So now it’s really up to the Senate to get the process of enacting an adequate jobs bill back on track. The bill they passed in March provides a good starting point.
Thanks for joining me, Chad.