'The Economy is Growing, But It Is Not Growing Fast Enough'

 
Statement on the Employment Situation in May 

WASHINGTON, DC – Alan B. Krueger, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in May.

   

Problems in the job market were long in the making and will not be solved overnight.  The economy lost jobs for 25 straight months beginning in February 2008, and over 8 million jobs were lost as a result of the Great Recession.  We are still fighting back from the worst economic crisis since the Great Depression. 

Today we learned that the economy has added private sector jobs for 27 straight months, for a total of 4.3 million payroll jobs over that period.  The economy is growing but it is not growing fast enough. BLS’s establishment survey shows that private businesses added 82,000 jobs last month, and overall non-farm payroll employment rose by 69,000.  The unemployment rate ticked up from 8.1% in April to 8.2% in May, according to BLS’s household survey.  However, the labor force participation rate increased 0.2 percentage point to 63.8%, and employment rose by 422,000 according to the household survey. 

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.  Just like last year at this time, our economy is facing serious headwinds, including the crisis in Europe and a spike in gas prices that hit American families’ finances over the past months.  It is critical that we continue the President’s economic policies that are helping us dig our way out of the deep hole that was caused by the severe recession. 

In the American Jobs Act and in the State of the Union Address, the President put forward a number of proposals to create jobs and strengthen the economy, including proposals that would put teachers back in the classroom and cops on the beat, and put our nation’s construction workers back on the job rebuilding our nation’s infrastructure. 

The President has also proposed a “To-Do List” of actions that Congress should take to create jobs and help restore middle-class security.  This includes eliminating tax incentives to ship jobs overseas, cutting red tape so responsible homeowners can refinance, giving small businesses that increase employment or wages a 10 percent income tax credit, investing in affordable clean energy, and helping returning veterans find work. 

The President is in Minneapolis today to announce a new executive action that will establish private sector partnerships to help military service members acquire recognized occupational credentials—as welders, as machinists, and ultimately in a broader range of occupations.  These partnerships will help service members find private sector jobs once they leave the military, and they will help firms in manufacturing and other industries that need workers to fill their vacant positions. 

Manufacturing employment continues to expand and manufacturers added 12,000 jobs in May.  After losing millions of good manufacturing jobs in the years before and during the recession, the economy has added 495,000 manufacturing jobs since January 2010--the strongest growth for any 28-month period since April 1995.  To continue the revival in manufacturing jobs and output, the President has proposed tax incentives for manufacturers, enhanced training for the workforce, and measures to create manufacturing hubs and encourage the growing trend of insourcing. 

Other sectors with net job increases included education and health services (+46,000), transportation and warehousing (+35,600), wholesale trade (+15,900), and temporary help services (+9,200).  Construction lost 28,000 jobs, accounting services lost 14,000 jobs, government lost 13,000 jobs, and leisure and hospitality lost 9,000 jobs.  State and local governments shed 8,000 jobs, mostly in education. 

As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and employment estimates can be subject to substantial revision.  Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.

(Click graph to enlarge.)