May Jobs

In last month's report, the U.S. economy created only 266,000 jobs, well below the anticipated million-jobs increase, and the unemployment rate ticked up by 0.1 percent to 6.1 percent. Labor force participation rose by 0.2 to 61.7 percent, but this merely gets participation back to its August (pandemic) level and remains well below the rate prior to the arrival of the coronavirus. In short, demand conditions in the economy are fine and improving, but the state of supply, particularly of labor, is holding growth down.

Here is a brief summary of the major economic indicators since the last jobs numbers:

• The Producer Price Index for final demand increased 0.6 percent in April;
• The Consumer Price Index increased 0.8 percent in April;
• Real average hourly earnings were unchanged from March to April;
• Orders for durable goods (including defense and aircraft) decreased 1.3 percent in April;
• New home sales decreased 5.9 percent in April;
• The Price Index of U.S. imports increased 0.7 percent in April;
• ISM Services Index increased 1.3 percentage points to 64.0 percent in May;
• ISM Manufacturing Index increased half a percentage point to 61.2 percent in May;
• Consumer Confidence Index decreased three-tenths of a point from 117.5 to 117.2 in May;
• ADP reported private sector employment increased by 978,000 jobs in May.