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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