It might seem like good news that the economy added 431,000 jobs in May and that the unemployment rate decreased from 9.9 percent to 9.7 percent, but a closer look at the Labor Department jobs report proves otherwise. This is a shocking jobs report, especially after the billions of dollars Congress has spent on different stimulus programs.
Of the 431,000 jobs created, only 41,000 were in the private sector, due to massive temporary Census Bureau hiring of primarily low-paying jobs. That’s not a typo—only 41,000 private sector jobs were created in May. The unemployment rate dipped to 9.7 percent because the labor force participation rate declined to 65 percent from 65.2 percent in April, as the civilian labor force actually shrank by 322,000.
The teen unemployment rate rose by a full percentage point to 26.4 percent. The unemployment rate of unskilled adults rose to 15 percent. In addition, the existing unemployed aren’t finding jobs either—46 percent of those out of work have been jobless for 6 months or longer, a record since BLS began tracking the data in 1948.
The job market clearly is not improving. Rather than taxing and regulating American jobs out of existence by “reforming” healthcare and financial regulation, Congress needs to make the current tax rates permanent and cut spending.
Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.
