State of the Labor Market

May Jobs Report: No Sign of Slowing in the Labor Market

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Strong job growth, low unemployment rate, but with workers still waiting for wage growth to take off.

This recovery is showing no sign of slowing down. With strong job numbers of 223,000, a drop in the unemployment rate to its lowest level since 2000, the labor market is continuing its longest streak of job growth on record. In addition, the share of the labor force that is long-term unemployed has finally reached its pre-recession low of 0.7%.

While the May jobs report is almost entirely positive, there are a few downsides. Both the prime-age employment-population ratio and the rate of workers working part-time for economic reasons have continued to hold around their levels of the last few months. The fact that the rate of workers who are working part-time for economic reasons remains elevated is reflected in the fastest growing job searches on Indeed.com, which include terms like “full-time” and “9 to 5.” This suggests that the demand from workers for full-time work has not yet been met.  In addition, despite a tick up this month, wage growth remains in the range we’ve been seeing for the last few years, suggesting that it still may not be accelerating any time soon.

Overall, this report is consistent with where we’ve been for awhile: strong job growth, low unemployment rate, but with workers still waiting for wage growth to take off.

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