Jobs Report Holds Mixed Message for Small Businesses
U.S. employers added just 69,000 jobs during the month of May, according to labor market figures released Friday by the U.S. Department of Labor. This is far below the projected estimate of more than 240,00o jobs.
Meanwhile, the U.S. unemployment rate rose to 8.2 percent in May, up from 8.1 percent, mostly because more people entered the workforce at the close of the school year. Also, the number of long-term unemployed (those jobless for 27 weeks and over) rose from 5.1 to 5.4 million in May. These people accounted for 43 percent of the unemployed. The number of people employed part time for economic reasons (sometimes referred to as "involuntary" part-time workers) crept up to 8.1 million over the month. These people were working part time because their hours had been cut back or because they were unable to find a full-time job.
Raymond J. Keating, the chief economist for the Small Business & Entrepreneurship Council, said the data was worse than expected.
“The establishment survey pointed to an increase of only 69,000 in employment for the month of May, far below expectations and where job creation should be—at 240,000 to 250,000—during a recovery,” he told the San Antonio Business Journal.
Keating added that, "The U.S. economy desperately needs a change in public policy to ignite entrepreneurship and investment, and the economic growth and job creation that result. If that does not happen, we all better get used to slow growth and poor job creation."
Job Losses and Gains by Industry
In May, employment rose in health care, transportation and warehousing, and wholesale trade, while construction lost jobs. The biggest gain in jobs—23,000—was in the subset of healthcare jobs known as ambulatory health care services (doctors' offices and outpatient care centers). Over the year, health care employment has risen by 340,000.
The government's "Employment Situation Report" is the latest in a gloomy string of news about the economy. Thursday, the Automatic Data Processing Inc. Employment Report showed hiring had increased for the 28th month in a row – but that it still reflected a notable slowdown in the recent pace of hiring. Also Friday, a study released by PayNet, a research firm that tracks loans to small business, showed lending to small businesses shrank by 2 percent in April after falling 3 percent in March.
Hard to Find Good Help
The National Federation of Independent Business Friday released a summary of its May hiring survey, showing May's numbers "were weaker than April's and do not breed confidence that strong economic growth is just around the corner." The report, based on a survey of 681 small businesses, showed the net change in employment to be zero.
The NFIB survey showed small-business owners still struggle to find qualified applicants to fill jobs. Some 51 percent of owners hired or tried to hire in the past three months, but 73 percent of those reported few or no qualified applicants for the positions. And 19 percent reported having openings for skilled workers. The percentage of owners reporting they had jobs they struggled to fill rose three points to 20 percent—the highest since June 2008.
How do you think these numbers impact your company?
Image by OPEN Forum