The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for May 2022 on Friday, June 3rd. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.
Employment in the U.S. rose by 390,000 jobs. The jobs report exceeded the Geographic Solutions, Inc. forecast of 205,000. While the result is significantly higher than expectations, it remains well within the prediction interval during such a volatile period. The Wall Street Journal forecast of 328,000 was closer to the result. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).
The unemployment rate remained the same at 3.6%, exactly at the Geographic Solutions forecast and above the WSJ forecast of 3.5%. The unemployment rate forecast used internal data on the number of job openings, job searchers, job applications, job severances, and the number of applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.
Job creation was strongest in Leisure & Hospitality (84,000), Professional & Business Services (75,000), and Education & Health Services (74,000). Job growth was flat to positive in all industries.
While Manufacturing employment did not emerge past its pre-pandemic level in May as expected, the Information sector did, joining Construction; Professional & Business Services; Trade, Transportation, & Utilities; and Financial Activities as one of the sectors that has recovered all jobs lost since the beginning of the pandemic. Leisure & Hospitality employment continues to grow but is the only sector to remain more than 3% below its pre-pandemic employment level.
The labor force participation rate increased to 62.3% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment ticked up to 7.1%.
Employment may be settling into a monthly pattern of 400,000 new jobs which can be expected to continue for a few more months. However, the labor market picture becomes murkier afterwards as consumers deplete savings accumulated from pandemic relief while wage increases are still below the rate of inflation.