Jobs Picture Disappointing in May

American businesses didn’t do much hiring in May. Nearly all the 431,000 jobs added to the economy were temporary census workers, the Bureau of Labor Statistics reported Friday.

The nation’s unemployment rate fell 0.2 percent to 9.7 percent last month, largely because the pool of job seekers shrank. Manufacturing, temporary help services and mining added jobs, while construction jobs declined, the government said.

Private employers added only 41,000 jobs in May, a weaker-than-expected performance. Private-sector hiring had grown by 218,000 in April.

About 15 million people were looking for work but unable to find it in May. Of those, a record 6.8 million—or 46 percent—had been jobless for six months or more. The number of discouraged workers, those who believe they won’t find work and have given up looking, has risen by 291,000 over the last year to 1.1 million.

Despite the national reaction to the report, President Obama said Friday he was optimistic about job growth in the United States. “While we recognize that our recovery is in its early stages, and that there will be ups and downs in the months ahead,” he said,” this report is a sign that our economy is getting stronger by the day.”

More older workers jobless

For older workers, the job situation worsened in May. The unemployment rate for people age 55 and up rose for a third straight month to 7.1 percent in May. It was 7 percent in April and 6.9 percent in March.

Among men in that age group, the jobless rate increased from 7.5 percent in April to 7.6 percent last month. Women saw a bigger jump in unemployment, from 5.7 percent in April to 5.9 percent in May.

Older workers also reported being unemployed for a longer time—44.2 weeks on average last month compared with 42.9 weeks in April, according to Sara Rix, a strategic policy adviser for AARP. For younger workers, the duration of unemployment fell from 34.7 weeks in April to 33.7 weeks in May.

Rix says the employment situation “is a long way from recovery” for older workers, adding that nearly six of 10 were without a job for at least 27 weeks.

Because the shift from employer-provided pensions to defined-contribution plans has placed the burden of a secure retirement squarely on workers’ shoulders, Rix says, “most [unemployed] people 55 to 64 don’t have much choice but to remain in the labor force looking for work.”

At one time some workers were eligible for pensions by age 55, she says. “They had a cushion or an income supplement that would help carry them through until they reached the Social Security retirement age. Workers today are less likely to have access to those benefits. It’s not a rosy picture.”

Jobs outlook remains gloomy

Mitchel Schlesinger, managing director of FBB Capital Partners, an investment management firm in Bethesda, Md., says Friday’s labor report was more gloomy than it appeared to be. The drop in the jobless rate, he said, was because more people stopped looking for work, and thus were no longer counted as unemployed.

He says businesses won’t add employees until at least later this year because demand for products and services is still weak. Europe’s economic turmoil is also adding to employers’ reluctance to hire.

“We might see a pickup in hiring toward the end of the year, but I think it’ll be muted,” Schlesinger says. “I wouldn’t expect a significant increase in jobs until the first or second quarter of next year. It’s pretty bleak.”