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Unemployment Hits 4.6, Press Announce “Cooling Economy”

This is madness:

The American economy added a surprisingly weak number of jobs in May, a sign that nervousness over a cooling economy may be spreading among the nation’s employers.
The net increase in nonfarm payrolls in May — 75,000 — is a significant falloff from April, when the Labor Department estimates that 126,000 jobs were added, a figure it revised downward today from the 138,000 it initially reported.
Anything below about 150,000 net new jobs a month is regarded as too slow to keep up with population growth, so in effect, workers are losing ground.
Using figures from a different statistical survey, the Labor Department reported today that the unemployment rate edged slightly lower in May to 4.6 percent, from 4.7 percent in April. Only people who are actively seeking work are counted, not those who have given up trying, so it is not unusual for the rate to fall in months of weak job growth. While by some measures the economy roared along during the first three months of the year, many economists expect it to slow in the second half. Few expect a recession, but there is little agreement over just how much it will cool off.

So just to recap: Unemployment falls. GDP races ahead by 5.3 percent (“some measures”) – the fastest growth in 2 1/2 years. Yet the New York Times surveys this landscape and declares, “The sky is falling! Look out!”
The Washington Post’s report on the job numbers also leads with the falloff in job creation, but it is a little less alarmist about the future of the economy:

“Clearly, when the April figures came out, it was easy enough to say ‘It’s only one’ and indeed we anticipated a snapback in May. We were clearly wrong about that,” [Stephen] Stanley [of RBS Greenwich Capital] wrote. “. . . . Now that there are two consecutive bad results, it is more difficult to write it off. That being said, there is very little corresponding evidence that labor demand has weakened by nearly as much as these data suggest, so we are skeptical but respectful.”

The AP’s account is more balanced, but still pessimistic:

Job growth faltered in May, with employers boosting payrolls by just 75,000. Yet the nation’s unemployment rate dipped to 4.6 percent, the lowest since the summer of 2001.
The latest snapshot, released by the Labor Department on Friday, offered a mixed picture of the jobs climate. Wage growth, meanwhile, slowed, a development that should ease concerns about inflation getting out of hand. […]
The payrolls figure and the unemployment rate come from two different economic surveys, which can sometimes provide – as in Friday’s case – a conflicting picture of what is happening in the labor market.

It is likely that the economy will not repeat last quarter’s astonishing growth — how long can 5.3 percent expansion be sustained? But looking at the press coverage of today’s jobs report, one would be forgiven for thinking that by August, the most difficult decision facing average Americans will be whether to eat Whiskas and Friskies. We’re at near-full employment. Is this a problem of unrealistic expectations, or is there some other agenda driving this relentlessly downbeat coverage?


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