While the May jobs report released Friday was overall better than expectations with the unemployment rate falling to a post-crisis low of 3.8%, America’s workforce still faces a few distinct challenges.
To be sure, this is the lowest unemployment rate in 18 years. Moreover, wage gains for May were also better than analysts’ forecasts with average hourly earnings rising 2.7% over the prior year.
But Martha Gimbel, an economist at the jobs site Indeed, points out a few downsides to the “almost entirely positive” jobs report. For one thing, the rate of workers employed only part-time for economic reasons — aka, “involuntary part-time workers” — remained basically unchanged for the month of May at 4.9 million. These are people who would prefer full-time jobs but either couldn’t find them or had their hours cut.
“The fact that the rate of workers who are working part-time for economic reasons remains elevated is reflected in the fastest growing job searches on Indeed.com,” Gimbel noted, “which include terms like ‘full-time’ and ‘9 to 5,’ showing that the demand from workers for full-time work has not yet been met.”
Wage growth has also been in the same range the U.S. labor force has seen in the past few years, Gimbel noted, suggesting that it may not be picking up in the near future. Friday’s jobs report also pointed out that the number of discouraged workers — those who aren’t looking for jobs because they don’t believe any are out there for them — was little changed from a year earlier at 378,000.
“Overall, this report is consistent with where we’ve been for awhile: strong job growth, low unemployment rate, but with workers still waiting for wage growth to take off,” Gimbel noted.
May’s positive jobs report came after a mixed report April when unemployment fell to 3.9% but job gains missed expectations.
Erin Fuchs is deputy managing editor for Yahoo Finance.