175,000 New Jobs in May Signals Guarded Optimism

Over the past few years, the warmth in the air meant a cold spell in the job market. A downturn in jobs has been the norm each spring – that is, until 2013 (source).

In May, there were 175,000 new jobs, yet another indication that the economy is making slow but steady progress.

While this is certainly good news, cautious optimism should be the course of action as we move forward. Why? The last two months’ data show 12,000 fewer jobs each month than was initially projected. What’s more, there is significantly less growth in the past three months than the previous three, going from 233,000 from December through February to 155,000 in March through May.

In addition, most of the other important numbers stayed relatively the same. For example, the total amount of hours worked remained essentially the same, and the average hourly earnings increased by just one penny (up two percent from a year ago).

Meanwhile, the monthly unemployment rate actually went up one-tenth of a percentage point to 7.6% (source). This is because there were an estimated 420,000 new job seekers, which is a potential indication that more people are optimistic about actually seeking – and finding – a job.

There were also a fairly high number of temporary jobs in May – more than 25,000. This is perhaps because employers are ready to dip their toes into the water, but perhaps not yet ready to jump in with both feet.

A recent New York Times article put things into perspective, essentially pointing out that we are still feeling the effects of the recession. The progress we’ve made has only put a small dent into the job shortage; in fact, it would take nearly five years of similar monthly job growth to return to the pre-recession levels the country enjoyed in late 2007.