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Economy: Jobs Report Shows 38,000 Jobs Added — Healthcare The Only Industry That Grew

By Greg Hoadley
Published on: 05:20 PST, Jun 3, 2016

In a sign that the economy may be slowing down, the monthly jobs report released today for May revealed that just 38,000 jobs were added last month, according to the U.S. Department of Labor.

According to Forbes, “These results were far off economists’s already tempered expectations for about 155,000 jobs added and for the unemployment rate to decline to 4.9%.”

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May jobs report
May jobs report conflicts with recent reports on consumer confidence. [Image by Shutterstock]

In spite of this, the unemployment rate declined to 4.7 percent, the reason being that fewer unemployed are actively seeking employment — the Department of Labor only counts those who are actively looking for jobs as “unemployed.” The current participation rate 62.6 percent, slightly down from 62.8 percent in April. But as CNS News stated in October, when the rate was 62.4 percent, this means, “A record 94,610,000 Americans were not in the American labor force,” and that this is the lowest record of worker participation in the U.S. economy in 38 years.

“It seems like in all gains we had seen in the winter months got reversed,” said Satyam Panday, U.S. economist at S&P Global Ratings, told Forbes.

Equally disappointing news for the economy was that the March and April jobs report were both revised down: March was initially recorded at 208,000 jobs gained, but newer data shows that number is actually 186,000, while the April jobs numbers went from “an already light 160,000,” according to Forbes, to 123,000.

“Net total job gains in March and April were therefore 59,000 lower than BLS previously reported and monthly job gains over the past three months have averaged 116,000. This is well below the 200,000 level where job additions have hovered for much of the last five years and 219,000 average over the prior 12 months.”

The only industry that gained jobs was healthcare, with 46,000 — meaning that the rest of the economy had a net loss of 8,000 jobs. For instance, information saw a loss, but this was due to 35,000 striking Verizon employees, Forbes said. However, Blaming the strike doesn’t help that much.

According to Fox Business, “Even without the Verizon strike, payrolls would have increased by a mere 72,000.”

Because they were striking, Fox Business added, they were counted as “unemployed” during April, But since they went back to work on Wednesday, June 2, they “are expected to boost June employment.”

Also losing jobs were the manufacturing (18,000) and mining industry (10,000).

Janet Yellen, Chairman of the Federal Reserve Board, said that “monthly gains of roughly 100,000 jobs are needed to keep up with growth in the work-age population,” Fox Business reported.

According to the Boston Globe, the “much-weaker-than-expected” jobs report means that the Federal Reserve may not raise the short-term interest rate in June.

But economic experts were also “surprised” by the low job numbers, the Globe said, “in part because most recent economic reports have been encouraging: Consumer spending surged in April. Americans ramped up purchases of autos and other big-ticket items, like appliances.”

Meanwhile, sales of new homes are the highest they have been in eight years, while construction has also increased.

Adding to the confusion was “recent data that has suggested consumers are feeling good,” Forbes said.

The jobs report is already affecting the presidential race, as the Globe reported.

Donald Trump, the presumptive Republican nominee, tweeted, “Terrible jobs report just reported. Only 38,000 jobs added. Bombshell!”

Hillary Clinton, who is the likely Democratic nominee, has thus far been silent on the jobs report, while Vermont senator Bernie Sanders issued a tweet yesterday lamenting that “15.5 million children in our country live in poverty.”

What do you think? Will the economy improve in the months ahead, and add more jobs?

[Image via Shutterstock]

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