Courtesy of Mish.
Initial Reaction
On the surface, this appeared to be a very strong jobs report from both the household survey and establishment survey perspective.
The establishment survey reported a gain of 288,000 jobs while the household survey sported a gain in employment of 407,000. In addition, May was revised up from +217,000 to + 224,000, and April revised up from +282,000 to +304,000.
Digging deeper into the details, strength was entirely part-time (and then some).
Voluntary part-time employment rose by a whopping 840,000 and involuntary part-time employment rose by 275,000.
Compared to a total gain of employment of 407,000, the gain in total part-time employment was 1,115,000. I confirmed with the BLS that one cannot directly subtract those numbers because of seasonal reporting.
However, one can compare full-time employment this month to last month. Doing so shows a decline in full-time employment of 523,000!
May BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +288,000 – Establishment Survey
- Employment: +407,000 – Household Survey
- Unemployment: -325,000 – Household Survey
- Involuntary Part-Time Work: +275,000 – Household Survey
- Voluntary Part-Time Work: +840,000 – Household Survey
- Baseline Unemployment Rate: -0.2 at 6.1% – Household Survey
- U-6 unemployment: -0.1 to 12.1% – Household Survey
- Civilian Non-institutional Population: +192,000
- Civilian Labor Force: +81,000 – Household Survey
- Not in Labor Force: +111,000 – Household Survey
- Participation Rate: +0.0 at 62.8 – Household Survey
Additional Notes About the Unemployment Rate
- The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
- In the past year the working-age population rose by 2,262,000.
- In the last year the labor force declined by 128,000.
- In the last year, those “not” in the labor force rose by 2,390,000
- Over the course of the last year, the number of people employed rose by 2,146,000 (an average of 178,833 a month)
The working-age population rose by over 2 million, but the labor force declined. People dropping out of the work force accounts for nearly all of the declining unemployment rate.
…
