Research
BLS Report: Job Growth Slows to 75,000 as Wage Growth Dips to 3.1 Percent
Daniel Zhao
Chief Economist at Glassdoor | Jun 7, 2019
The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Senior Economist Daniel Zhao:
This morning's jobs report shows a slowing labor market in May, with employers adding a low 75,000 new jobs, well below the average of 223,000 new jobs added in 2018. The unemployment rate held steady at 3.6 percent, a 50-year low. Today’s report shows employers are taking their foot off the gas. But while the report is weaker than expected, it’s not a hard step on the breaks.
Wage growth also ticked down to 3.1 percent in May. Wage growth still remains elevated above the 3.0 percent mark, but the downward move does raise concerns in a labor market that has seen stubbornly slow wage gains for American workers. In Glassdoor's Job Market Report, median base pay growth increased slightly in May to 2.0 percent year-over-year, still positive but below the stronger numbers from late 2018.
In May, the labor force participation rate held steady at 62.8 percent, continuing weakness from the last few months. The stabilization in the rate may indicate that the labor market is running out of workers to draw off the sidelines and that demographic factors like an aging population are starting to overwhelm the effects from a tightening labor market.
Professional and business services (+33,000 jobs added), health care and social assistance (+24,000 jobs added), and leisure and hospitality (+26,000 jobs added) continue to carry the labor market in 2019 and saw the most gains in May’s report. In general, the service-providing sectors are driving the largest job gains, contributing 82,000 new jobs while the goods-producing sector added only 8,000 jobs.
Manufacturing (+3,000 jobs added) had a disappointing month, following several months of weakening employment growth and adding fuel to concerns that the escalating trade war could hamper the sector. Several sectors saw declining job growth. Retail saw a weak -7,600 new jobs. Government (-15,000 jobs added) also declined, indicating that Census hiring hasn't shown up yet but can be expected to boost numbers in coming months.
Glassdoor’s Job Market Report, a real time look at jobs and wage growth across the U.S. and in 10 major metros, has also seen declining job openings in manufacturing, indicating that the slowdown in the goods-producing sectors may worsen in the near future.
The weak report will likely increase pressure on the Fed to cut rates, especially if the softness continues or worsens. As the goods-producing sectors slow down, escalating tensions from the trade war could also threaten the slowing expansion. Ultimately, despite the slowdown in jobs added, the fundamentals of the labor market remain strong—May's report is consistent with data that the expansion is slowing but not stopping.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:Labor Market
