Black Unemployment Rate Rises in May After Mild-Winter Hiring Spurt

By Frederick H. Lowe
The seasonally adjusted unemployment rate climbed in May for black men and black women 20 years old and older, but the trend was mixed for whites in the same age group, and the reasons behind the latest jobs report are complicated.

The private sector created 69,000 jobs in May, the U.S. Bureau of Labor Statistics (BLS) reported.

Goldman Sachs Research, a New York-based based investment and brokerage firm, said an unseasonably warm winter led to higher job growth in January and February, and weaker job growth in May, which Goldman Sachs and other economists call “payback.”

“Our best guess is that weather added around 100,000 to the level of payrolls as of February and subtracted a total of 70,000 in March and April, which would leave another 30,000 payback for the May report,” Goldman Sachs said.  
Dr. Heidi Shierholz, a Ph.D. labor-market economist, said if hiring had followed its normal pattern, 30,000 additional jobs would have been added in May, bringing the total to 99,000 new jobs, not 69,000.

Other factors figured into May's jobs' picture. They include a drop in “help-wanted” ads and the perception that jobs are harder to get, Goldman Sachs found. Before the BLS released its figures, Goldman Sachs predicted a “soft employment” report for May.

The Bureau of Labor Statistics reported that the seasonally adjusted unemployment rate in May rose to 8.2 percent, compared with April's 8.1 percent rate.

The jobless rate for African Americans was 13.6 percent in May, up from 13 percent in April, BLS reported on Friday. May 2012's unemployment rate, however, was much lower than the 16.2 percent recorded in May 2011 for both black men and women.

The biggest jump in joblessness last month occurred among black men, who saw their unemployment rate soar to 14.2 percent, compared with 13.6 percent in April. The BLS reported that 1.2 million black men were unemployed, up from April's figure of 1.1 million black men n counted as out of work. The jobless rate for black men in May 2012, however, is much lower than the 17.4 percent reported last May.
 
Black women fared somewhat better in the job market. Their jobless rate was 11.4 percent in May, up from 10.8 percent in April. Last month's jobless rate, however, was much lower than the 13.4 percent unemployment rate recorded in May 2011. The number of black women unemployed in May was 1.1 million, compared with 1 million in April, said the Bureau of Labor Statistics.

“The black unemployment rate is volatile month-to-month,” Shierholz said. “We would like to see it continually go down, but I don't consider May's numbers a trend, because it [the unemployment rate] has been heading down."

The seasonally adjusted unemployment rate for white women 20 years old and older improved to 6.7 percent in May, down from 6.8 percent in April. The unemployment rate for white men in the same age group edged up slightly in May to 7 percent from 6.8 percent. The jobless rate in May for Hispanics was 11 percent, and the unemployment rate for Asians was 5.2 percent, but that figure was not seasonally adjusted.

The BLS May jobs data were much lower than ADP National Employment Report issued a day earlier. ADP, which bases its data on information provided by 344,000 of its U.S. business clients, reported the private sector created 133,000 jobs in May, compared with 113,000 in April, which was revised downward from 119,000.
 
Formally known as Automatic Data Processing Inc., ADP reported job increases among large, mid-size and small companies, with small companies that employ up 49 workers, creating 67,000 new jobs, the most of the three employer groups.

Construction employment, however, fell by 1,000 in May, the second decline six months. ADP, based in Roseland, N.J., surmised that the unseasonably warm winter weather prompted employers to hire earlier, instead of waiting until spring.

Economists generally don't cite ADP's numbers because its methodology is not as transparent as the BLS statistics are. “The Bureau of Labor Statistics is the gold standard,” Shierholz said.

BLS reported the health care industry remains robust, hiring 33,000 in May. Transportation and warehousing added 36,000 jobs, and employment in wholesale trade rose by 16,000. Manufacturing also added jobs, and construction lost jobs. Employment in professional business services remained unchanged, as did employment in mining, logging and retail.

The Center for Budget and Policy Priorities called May's jobs report disappointing.

“Although private employers have added jobs for 27 straight months, the economy still lacks the strength to generate the kind of job growth, 200,000 to 300,000 jobs a month or more on a sustained basis that would restore normal employment in a reasonable time frame,” wrote Chad Stone, the center's chief economist.

Alan B. Krueger, chairman of the White House Council of Economic Advisers, said the economy is growing, but not fast enough.“There is much more work that remains to be done to repair the damage caused by the financial crisis and deep recession that began at the end of 2007,” Krueger said.