Economy adds 431K jobs but few in private sector
WASHINGTON (AP) -- Job creation by private companies grew at the slowest pace since the start of the year, as a wave of census hiring lifted payrolls by 431,000 in May. The unemployment rate dipped to 9.7 percent as people gave up searching for work.
The Labor Department's new employment snapshot released today suggested that outside of the burst of hiring of temporary census workers by the federal government many private employers are wary of bulking up their work forces.
That indicates the economic recovery may not bring relief fast enough for millions of Americans who are unemployed.
Virtually all the job creation in May came from the hiring of 411,000 census workers. Such hiring peaked in May and will begin tailing off in June.
By contrast, hiring by private employers, the backbone of the economy, slowed sharply. They added just 41,000 jobs, down from 218,000 in April and the fewest since January.
"Although the economic outlook is improving, the recovery is still pretty tepid," said Paul Ashworth, senior U.S. economist at Capital Economics.
The weakness in private hiring rattled Wall Street before the market opened. Stock futures tumbled and bond prices rose, as investors sought the safety of U.S. Treasurys.
The unemployment rate, which is derived from a separate survey than the payroll figures, fell to 9.7 percent from 9.9 percent. The dip partly reflected 322,000 people leaving the labor force for a variety of reasons.
All told, 15 million people were unemployed in May.
Counting people who have given up looking for work and part-timers who would rather be working full time, the "underemployment" rate fell to 16.6 percent in May from 17.1 percent in April. That reflected fewer people forced into part-time work. Still, the high underemployment figure shows how difficult it is for jobseekers to find work.
The number of people out of work six months or longer reached 6.76 million in May, a new high. They made up 46 percent of all unemployed people, also a record high.