Friday’s employment report blew away projections: 339,000 new jobs. Federal Reserve officials believed labor-market tightness was easing, but the new data show a vigorous job market more than a year into the central bank’s tightening campaign to slow the economy.
“This is not an economy that looks like it is about to fall into an imminent recession,” said
Bruce Kasman,
chief economist and head of global economic research at
JPMorgan Chase.
Those looking for signs of easing pointed to a higher unemployment rate in May, up 0.3 percentage point to 3.7%, and 440,000 more unemployed workers.
But the percentage of prime-age workers who have jobs or are looking for one reached its highest level in 21 years, 83.3%, for the month of May, according to Bureau of Labor Statistics data. Prime-age workers are those between 25 and 54 years old.
Workers across nearly all age groups were participating in the economy by holding down a job or looking for one at the same level or higher than right before the pandemic. People over 75 years old were an exception. Experts say that was most likely because of health fears.
And women reached a new milestone. The labor participation of prime-age women workers was at its highest level on record for the month of May, a continuation of a long-term trend of more educated women and the growth of industries that heavily employ women.
“It raises a question as to how many workers you can pull in,”
Wells Fargo
senior economist
Sarah House
said after Friday’s report.
A potential way to bring in new workers could be by dealing with the decadeslong decline of labor participation by prime-age men, which fell to 89.2% this May from 94.2% in May 1980. Over the same period, the participation of women of the same age rose to 77.5%, from 63.8%.
Participation by women has surged as many of them marry later, give birth to fewer children and have closer ties to the labor market when they are single, House said. And many of them have found jobs in the fast-growing healthcare sector.
Part of the difficulty in boosting the falling participation rate among prime-age men is the decline of male-dominated industries such as manufacturing, House said.
And that brings up a darkening cloud in the economy: Manufacturers shed 2,000 jobs in May.
Timothy Fiore,
who analyzes the Institute for Supply Management’s monthly survey of manufacturers, said Thursday that factory managers have concerns that order backlogs have dried up. Those backlogs are at the levels of 2009 at the time of the financial crisis. If orders don’t pick up, Fiore believes that there could be corporate restructurings, including employee cutbacks, announced in second-quarter earnings calls.
“Right now the future is very cloudy,” Fiore said of manufacturers.
But with current prime-age participation rates hovering at multidecade highs, pulling in new workers won’t be easy, and demand for them could help keep the labor market heated.
Write to Bob Fernandez at [email protected]
