Economic Research and Data

Economic Trends

Filling you in on the current state of the economy

06.05.07

Economic Activity and Labor

The Employment Situation

Nonfarm payroll employment's May increase of 157,000 was much stronger than expected and higher than the ADP report for May employment (+97,000). Revisions for March and April were minimal (–10,000), which was better than the recent pattern. So far, the average monthly gain in 2007 is 133,000 jobs, but it continues to lag behind last year's average monthly gain of 189,000 jobs.

Employment growth in service-providing industries increased sharply in May (+176,000), after a lackluster April (+119,000). Most of the service sector gains came from education and health services (+54,000), leisure and hospitality (+46,000), and professional business services (+32,000). May's service sector payroll growth mirrored last year's healthy monthly average of +179,000.

Goods-producing industries continued to soften, losing 19,000 jobs, all of them in the manufacturing sector (construction employment was flat). Job cuts in manufacturing resulted directly from weakness in the motor vehicles and parts sector, which was in line with recent trends: Almost half of manufacturing payroll reductions in the last 12 months (–164,000) have come from motor vehicles and parts.

Labor Market Conditions

        Average monthly change
(thousands of employees, NAICS)
  2004 2005 2006 Jan-Apr 2007 May 2007
Payroll employment
172
212
189
127
157
  Goods-producing
28
32
9
–16
–19
    Construction
26
35
11
–3
0
    Manufacturing
0
–7
–7
–15
–19
      Durable goods
8
2
0
–14
–15
      Nondurable goods
–9
–9
–6
–2
–4
  Service-providing
144
180
179
142
176
    Retail trade
16
19
–3
14
–5
    Financial activitiesa
8
14
16
0
2
    PBSb
38
57
42
16
32
      Temporary help services
11
18
–1
–6
–9
    Education and health services
33
36
41
46
54
Leisure and Hospitality
25
23
38
22
46
  Government
14
14
20
26
22
                 
  Average for period (percent)
Civilian unemployment rate
5.5
5.1
4.6
4.5
4.5

a.Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
b. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services.
Source: U.S. Department of Labor, Bureau of Labor Statistics.

 

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