Superficially, the headlines for the May job's report don't look that bad. 38,000 jobs were created and the unemployment rate fell to a post recession low of 4.7% from 5% in April.
However, that 38,000 is the lowest number of jobs created in the last 5 years. Also understand, that in order to lower the unemployment rate by 3-tenths of a percent from the month prior, 477,000 jobs would have had to be created against April's workforce size of 159.9 million workers. So, you have to wonder what gives?
Well the "what" that "gives" is that the number of unemployed fell by 484,000, and at the same time, the size of the workforce fell by 458,000. This tells me that the majority of people who left the workforce were unemployed and have just given up looking for work in frustration. As such, an unemployed worker who is not looking for work is not counted as part of the workforce. This is also why the number of long term unemployed fell by 178,000. Most likely, because they stopped looking for work and not because they found it. If they had found work, the number of jobs created would be higher than 38,000.
The bad new doesn't stop there. The number workers who are working part time because they are not able to find full time work, rose by an amazing 468,000, to a total of 6.4 million. To put this into perspective, just 4.5 million workers were in this same employment condition in May 2007.
The bottom line is that we have an economy that isn't producing jobs; despite the spin by President Obama. We have too many people giving up looking for work and too many people working part time for economic reasons. If this condition extends into next month, we could be looking at the beginning of a recession.
References:
May 2016 Employment Situation Report: http://www.bls.gov/news.release/pdf/empsit.pdf
May 2007 Employment Situation Report: http://www.bls.gov/news.release/archives/empsit_06012007.pdf
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