Labor market surprise: Much less horrible than usual

The economy shed "only" 345,000 jobs in May. Even with the unemployment rate rising to 9.4 percent, it's good news

Published June 5, 2009 1:17PM (EDT)

Is that the sound of an economy recovery beginning? The Bureau of Labor Statistics reported on Friday that nonfarm payroll employment in May fell by "only" 345,000. That's far less than the consensus estimate of 525,000 expected by economists surveyed by Dow Jones, and it is "about half the average monthly decline for the prior 6 months," according to the BLS.

That's the good news, directly from the BLS' "establishment survey" polling companies on their payrolls. The bad news is that the unemployment rate, which is calculated using a separate "household survey," bumped up from 8.9 to 9.4 percent. (The employment survey, according to BLS' handy FAQ, "includes the self-employed, unpaid family workers, agricultural workers, and private household workers.")

Manufacturing employment continued to get hammered -- likely a result of troubles in the auto industry -- as did the construction industry.

A 9.4 percent unemployment rate is the highest since August 1983, and, as the Wall Street Journal reports, "When marginally attached and involuntary part-time workers are included, the rate of unemployed or underemployed workers hit 16.4 percent last month, up from 15.8 percent in April." Those numbers aren't going to start going down until the economy actually begins adding jobs instead of losing them.

Still, the top line number, 345,000 jobs shed, is a pleasant surprise, and it will be interesting to see how the stock market responds.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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