Running in place. That is the best description of today’s employment report. The payroll survey reported employers’ adding a net 175,000 new jobs. Over the past year, employment growth has averaged 172,000 jobs a month. Job growth has barely improved. The same applies to hours at work – which remained flat – and for average hourly earnings, which increased by one cent.
Little has changed in the state of the labor market In most major industries, employment remained flat: construction, manufacturing, wholesale trade, transportation and warehousing, information, and financial services all barely budged. The largest gains came in temporary help services (+26,000), leisure and hospitality (+43,000), and retail trade (+28,000). Government employment fell slightly, with a drop in federal employment (-14,000) offset by increased local-government hiring (+13,000). The legendary sequester isn’t showing much of a bite.
The household survey similarly showed few changes. Unemployment rose 0.1 point to 7.6 percent, largely because more Americans returned to the job market and began looking for work but didn’t find it. So while the labor-force-participation rate edged up 0.1 points, the overall employment-to-population ratio remained constant. Even this increase in labor-force participation is mixed news — besides March and April of this year, labor force participation is at its lowest level since May 1979.
The economy is recovering from the recession, but only at a glacial pace. This employment report looks like most other employment reports over the past two years: adequate for normal times but disappointing during a recovery. While the fiscal-cliff tax hikes and the sequester have not pushed the economy into a recession, at this rate it will take a long time to return to full employment.
— James Sherk is senior policy analyst in labor economics at the Heritage Foundation Center for Data Analysis.