June, 04 2010, 04:03pm EDT
For Immediate Release
Contact:
Michelle Bazie,202-408-1080,bazie@cbpp.org
Statement: Chad Stone, Chief Economist, on the May Employment Report
Today's jobs report shows a labor market that has turned the corner
and is creating jobs but one with a long way to go toward a full
recovery from the devastating job losses of 2008-09. The percentage of
the population with a job is generally moving in the right direction but
remains at a very depressed level (see chart). Unemployment is still
very high, and jobs are still hard to find.
WASHINGTON
Today's jobs report shows a labor market that has turned the corner
and is creating jobs but one with a long way to go toward a full
recovery from the devastating job losses of 2008-09. The percentage of
the population with a job is generally moving in the right direction but
remains at a very depressed level (see chart). Unemployment is still
very high, and jobs are still hard to find.
Under these
circumstances, policymakers should have no qualms about passing a robust
jobs bill -- indeed, they would be derelict not to. Unemployed workers
struggling to find a job need the help, and based on current forecasts
of relatively weak economic growth for the rest of the year, the
economic recovery could really use an additional boost.
For over
a year now, the economy has benefited from the American Recovery and
Reinvestment Act, which included fast-acting and highly effective
measures that Congress should renew, such as additional unemployment insurance
(UI) benefits and subsidized COBRA health insurance coverage for
unemployed workers and fiscal assistance to states. The Congressional
Budget Office estimates that real (inflation-adjusted) gross domestic
product (GDP) was between 1.7 percent and 4.2 percent higher in the
first quarter of this year than it would have been without the Recovery
Act and that the number of full-time equivalent jobs was between 1.8
million and 4.1 million higher.
It may have been hard for
policymakers to see that the Recovery Act was working (in keeping things
from being much worse) while the economy was still losing jobs through
much of 2009. Now, by renewing UI/COBRA and state fiscal relief,
Congress has the opportunity to see positive results by making the
recovery stronger, with faster growth and job creation. Lawmakers got
off to a bad start last week, when the House failed to include state
fiscal relief and COBRA in the jobs bill that it passed. It's now up to
the Senate, which passed a better bill than the current House version in
March, to get the process of enacting an adequate jobs bill back on
track.
About the May Jobs Report
While there
are increasing signs that the long deterioration in the labor market is
over, there continue to be many more people looking for work than there
are new jobs being created and the unemployment rate remains
disturbingly high.
- Private and government payrolls
rose by 431,000 jobs in May, with 411,000 of those jobs coming from
temporary government hiring for the decennial census. Private-sector
payrolls rose by 41,000 jobs. State and local payrolls shrank by 15,000
and 7,000 jobs, respectively. There are 7.4 million jobs on nonfarm
payrolls than there were when the recession began in December 2007 and
8.0 million fewer jobs on private payrolls. - The
unemployment rate dropped back to 9.7 percent in May, the rate it has
been for most of this year. The number of unemployed fell but that
decline was largely accounted for by people leaving the labor force
rather than an increase in the number of people with jobs. - The
encouraging rise in labor force participation this year experienced a
temporary setback in May as more people left the labor force than
entered it. Still, the labor force participation rate (the percentage of
people with a job or actively looking for a job) is 0.4 percentage
points higher than it was in December of last year. - The
number of people with a job (which is estimated from a different survey
from the one used to estimate payroll employment) fell slightly in May.
As a result, the percentage of the population with a job edged down to
58.7 percent. That is still 0.5 percentage points higher than in
December. Nevertheless, both the labor force participation rate and the
percentage of the population with a job remain near lows that were last
seen in the 1980s. - The Labor Department's most
comprehensive alternative unemployment rate measure -- which includes
people who want to work but are discouraged from looking and people
working part time because they can't find full-time jobs -- moved down to
16.6 percent in May. While that figure is below the peak of 17.4
percent reached in October 2009, it is still quite high. - Long-term
unemployment remains a significant concern. Over two-fifths (46.0
percent) of the 15.0 million people who are unemployed -- 6.8 million
people -- have been looking for work for 27 weeks or longer. That is the
highest percentage on record in data going back to 1948. These long-term
unemployed represent 4.4 percent of the labor force, a higher
percentage than at any point in the past six decades (the next highest
was 2.6 percent in June 1983).
The Center on Budget and Policy Priorities is one of the nation's premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.
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