The Bureau of Labor Statistics (BLS) reported that there were 272,000 jobs created in May, which was much stronger than the 185,000 new jobs that had been forecasted. However, negative revisions to March and April cut 15,000 jobs in those months combined while the unemployment rate rose from 3.9% to 4%, which is the highest since January 2022.
What’s the bottom line? It’s important to look at both surveys within the Jobs Report, which told two different stories regarding job growth.
The headline job number comes from the report’s Business Survey, which is based predominantly on modeling and estimations. In fact, one of the biggest reasons we saw large job gains last month was the birth/death model, where the BLS estimates new business creation relative to closed businesses and how many jobs this created.
In May, this modeling added 231,000 jobs to the headline figure, which would have shown a gain of just 41,000 jobs otherwise.
Meanwhile, the Household Survey’s job creation component (which is considered more real-time because it’s derived by calling households) showed 408,000 job losses – a huge divergence from the headline figure! Looking more closely at this data, part-time workers increased by 286,000 while full-time workers fell by 625,000, suggesting some softening in the job market despite the strong headline number.