When employment number from earlier this year showed significant growth, we cautioned that such improvements could not be sustainable, as those job numbers were still riding on the coattails of the buoyant 2012 holiday shopping season.
It's no surprise then that May's unemployment report showed a significant decline in the creation of new jobs. Most analysts predicted some 150,000 new non-farm jobs for May. But the government report only showed that 69,000 jobs were created, pushing the national unemployment rate up from 8.1 to 8.2 percent.
The fragile U.S. economy is still very susceptible to both domestic and foreign factors. Domestically, sharply rising gas prices in March and April increased operation costs for public and private businesses, weakening incentives to hire workers. Foreign factors included the perpetually unstable European economy and its looming threat to damper investments and bank operations in America.
But, despite May's disappointing numbers, there are definite signs of long-term job growth in the U.S. Contrary to political rhetoric, the U.S. economy has added private sector jobs for 27 straight months, forming a total 4.3 million payroll jobs over that period. On the other hand, this growth is rendered insufficient thanks to the high nine percent unemployment rate set three years ago during the "Great Recession."
The private sector still needs to create more job openings, and the federal government still has a big challenge to encourage U.S. congress to pass several job-growth intiatives in the American Jobs Act.
Currently before congress are proposals to create millions of jobs, including putting unemployed teachers and police back to work in several states, and reviving the construction sector by rebuilding schools, colleges, and the nation's crumbling infrastructure. Despite the 2012 political campaign underway, hopefully congressional members will realize continued opposition to the Jobs Act is damaging the nation's economic structure, which outweighs any political gains.
Congressional opposition however does not give President Obama cause to surrender efforts to increase employment by alternative means, from seeking private sector support to creating jobs by executive order.
Last week in Minneapolis, Obama announced a new executive action that lets the private sector provide training for military veterans in high-demand areas, which will create jobs in manufacturing and other industries showing growth trends.
Manufacturing employment continues to expand, adding 12,000 jobs in May. Since January 2010, the U.S. economy added 495,000 manufacturing jobs, the strongest growth for any 28-month period since April 1995. More manufacturing jobs will be created if congress approves proposals for tax incentives for manufacturers and enhanced workforce training.
Healthcare service, transportation and warehousing, wholesale trade, and temporary help services also showed job growth in May. Construction however lost 28,000 jobs, while accounting services lost 14,000, government lost 13,000 and leisure and hospitality lost 9,000. State and local governments lost 8,000 jobs, mostly concentrated in education.