The crucial monthly jobs report was a disappointment, as the Labor Department reported Friday, June 4, that the economy added 431,000 jobs in May, well below consensus expectations of 513,000.
Even though the number of jobs added was the highest for a month in more than 10 years and the unemployment rate dropped to 9.7% from 9.9%, 411,000 of May’s increase came from government hiring of temporary census workers. The anemic private sector hiring of 41,000 jobs is the biggest concern for many analysts because the census jobs will dissipate over the summer and it was much lower than April’s rise of 218,000.
“The May employment report underscores the fragility of the economic recovery,” said Ethan Harris, head of Developed Economics Research for Merrill Lynch Global Research, in an analyst note. “We were looking for 200,000 on private payrolls; so, the critical number in today’s employment report is a disappointment. There is no way for us to get around that.”
Some of the weakness in private-sector payrolls stems from a loss of 35,000 jobs in construction and 7,000 jobs in retail.