THE EMPLOYMENT SITUATION — MAY 2015

Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline.

Household Survey Data

In May, both the unemployment rate (5.5 percent) and the number of unemployed persons (8.7 million) were essentially unchanged. Both measures have shown little movement since February.

Among the major worker groups, the unemployment rates for adult men (5.0 percent), adult women (5.0 percent), teenagers (17.9 percent), whites (4.7 percent), blacks (10.2 percent), Asians (4.1 percent), and Hispanics (6.7 percent) showed little or no change in May.

The number of unemployed new entrants edged up by 103,000 in May but is about unchanged over the year. Unemployed new entrants are those who never previously worked.

The number of persons unemployed for less than 5 weeks decreased by 311,000 to 2.4 million in May, following an increase in April. The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.5 million in May and accounted for 28.6 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 849,000.

In May, the civilian labor force rose by 397,000, and the labor force participation rate was little changed at 62.9 percent. Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent. The employment-population ratio, at 59.4 percent, was essentially unchanged in May.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged at 6.7 million in May and has shown little movement in recent months. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In May, 1.9 million persons were marginally attached to the labor force, down by 268,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 563,000 discouraged workers in May, down by 134,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.

 

Establishment Survey Data

Total nonfarm payroll employment rose by 280,000 in May, compared with an average monthly gain of 251,000 over the prior 12 months. In May, job gains occurred in professional and business services, leisure and hospitality, and health care. Employment in mining continued to decline.

Professional and business services added 63,000 jobs in May and 671,000 jobs over the year. In May, employment increased in computer systems design and related services (+10,000). Employment continued to trend up in temporary help services (+20,000), in management and technical consulting services (+7,000), and in architectural and engineering services (+5,000)

Employment in leisure and hospitality increased by 57,000 in May, following little change in the prior 2 months. In May, employment edged up in arts, entertainment, and recreation (+29,000). Employment in food services and drinking places has shown little net change over the past 3 months.

Health care added 47,000 jobs in May. Within the industry, employment in ambulatory care services (which includes home health care services and outpatient care centers) rose by 28,000. Hospitals added 16,000 jobs over the month. Over the past year, health care has added 408,000 jobs.

Employment in retail trade edged up in May (+31,000). Over the prior 12 months, the industry had added an average of 24,000 jobs per month. Within retail trade, automobile dealers added 8,000 jobs in May. Construction employment continued to trend up over the month (+17,000) and has increased by 273,000 over the past year.

In May, employment continued on an upward trend in transportation and warehousing (+13,000). Truck transportation added 9,000 jobs over the month. In May, employment continued to trend up in financial activities (+13,000). Over the past 12 months, the industry has added 160,000 jobs, with about half of the gain in insurance carriers and related activities. Employment in mining fell for the fifth month in a row, with a decline of 17,000 in May. The loss was in support activities for mining. Employment in mining has decreased by 68,000 thus far this year, after increasing by 41,000 in 2014.

Employment in other major industries, including manufacturing, wholesale trade, information, and government, showed little change over the month. The average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in May. The manufacturing workweek was unchanged at 40.7 hours, and factory overtime remained at 3.3 hours.

The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.

In May, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $24.96. Over the year, average hourly earnings have risen by 2.3 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $20.97 in May.

The change in total nonfarm payroll employment for March was revised from +85,000 to +119,000, and the change for April was revised from +223,000 to +221,000. With these revisions, employment gains in March and April combined were 32,000 more than previously reported. Over the past 3 months, job gains have averaged 207,000 per month.

 

Frequently Asked Questions about Employment and Unemployment Estimates

1. Why are there two monthly measures of employment?

The household survey and establishment survey both produce sample-based estimates of employment, and both have strengths and limitations. The establishment survey employment series has a smaller margin of error on the measurement of month-to-month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000. However, the household survey has a more expansive scope than the establishment survey because it includes self-employed workers whose businesses are unincorporated, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. The household survey also provides estimates of employment for demographic groups.

2. Are undocumented immigrants counted in the surveys?

It is likely that both surveys include at least some undocumented immigrants. However, neither the establishment nor the household survey is designed to identify the legal status of workers. Therefore, it is not possible to determine how many are counted in either survey. The establishment survey does not collect data on the legal status of workers. The household survey does include questions which identify the foreign and native born, but it does not include questions about the legal status of the foreign born.  On an annual basis, the establishment survey incorporates a benchmark revision that re-anchors estimates to nearly complete employment counts available from unemployment insurance tax records. The benchmark helps to control for sampling and modeling errors in the estimates.

4. Does the establishment survey sample include small firms?

Yes; about 40 percent of the establishment survey sample is comprised of business establishments with fewer than 20 employees. The establishment survey sample is designed to maximize the reliability of the statewide total nonfarm employment estimate; firms from all states, size classes, and industries are appropriately sampled to achieve that goal.

5. Does the establishment survey account for employment from new businesses?

Yes; monthly establishment survey estimates include an adjustment to account for the net employment change generated by business births and deaths. The adjustment comes from an econometric model that forecasts the monthly net jobs impact of business births and deaths based on the actual past values of the net impact that can be observed with a lag from the Quarterly Census of Employment and Wages. The establishment survey uses modeling rather than sampling for this purpose because the survey is not immediately able to bring new businesses into the sample. There is an unavoidable lag between the birth of a new firm and its appearance on the sampling frame and availability for selection.

6. Is the count of unemployed persons limited to just those people receiving unemployment insurance benefits?

No; the estimate of unemployment is based on a monthly sample survey of households. All persons who are without jobs and are actively seeking and available to work are included among the unemployed. (People on temporary layoff are included even if they do not actively seek work.) There is no requirement or question relating to unemployment insurance benefits in the monthly survey

7. Does the official unemployment rate exclude people who want a job but are not currently looking for work?

Yes; however, there are separate estimates of persons outside the labor force who want a job, including those who are not currently looking because they believe no jobs are available (discouraged workers).

8. How can unusually severe weather affect employment and hours estimates?

In the establishment survey, the reference period is the pay period that includes the 12th of the month. Unusually severe weather is more likely to have an impact on average weekly hours than on employment. Average weekly hours are estimated for paid time during the pay period, including pay for holidays, sick leave, or other time off. The impact of severe weather on hours estimates typically, but not always, results in a reduction in average weekly hours. For example, some employees may be off work for part of the pay period and not receive pay for the time missed, while some workers, such as those dealing with cleanup or repair, may work extra hours.

In the household survey, the reference period is generally the calendar week that includes the 12th of the month. Persons who miss the entire week’s work for weather-related events are counted as employed whether or not they are paid for the time off. The household survey collects data on the number of persons who had a job but were not at work due to bad weather. It also provides a measure of the number of persons who usually work full time but had reduced hours due to bad weather.

 

 

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