US unemployment rate growth slowed in May

Economic meltdown cooling?

The unemployment rate in the United States rose to 9.4 per cent in May, after employers cut 345,000 jobs. That's certainly nothing to be happy about, until you realize that this is about half the average job losses per month reported in the US for the past six months. And more good news: the May job cuts were a lot lower than expected.

According to the Department of Labor's Bureau of Labor Statistics, which puts together the monthly jobs report, there were steep job losses in the manufacturing sector. But declines were moderating in the services and construction segments of the US economy, which it estimates as having 132.2 million non-farm workers after the declines in May.

Since the recession in the States began in December 2007, seven million jobs have been eliminated. The BLS has had to revise its quarterly numbers a bunch of times, but says now that the job losses averaged 643,000 cuts per month over the past six months, the steepest part of the global economic meltdown. With job cuts being a lagging indicator, politicians and armchair economists are hoping - well, maybe they are really praying - that the decline in the job cut rate means the economy is already on the mend in the States.

It certainly isn't in the auto industry. Employment there peaked in February 2000, according to the BLS, and as of the end of May the number of jobs in motor vehicle and parts manufacturing has fallen by 50 per cent. Last month, the car and parts makers shed 30,000 jobs, and all told manufacturers shed 156,000 jobs.

The construction industry shed another 59,000 jobs in May, which is considerably better than the 117,000 jobs per month averaged across the last six months. Companies in professional and business services cut 51,000 jobs, which is better than the average of 136,000 job cuts over the previous six months running from November 2008 through April 2009.

The leisure and hospitality industry actually had no job cuts in May, after averaging 39,000 layoffs per month during the prior six months.

There is no way to use the monthly data coming out of the BLS to get a sense of unemployment in the IT sector, but you can tease out some statistics about IT vendors, if you use that term loosely.

The BLS reckons that employment for computer and electronics parts manufacturers dropped by 13,600 in May, to 1.15 million workers. Within this group, computer and peripheral equipment makers shed 2,600 jobs, to 165,200, while communications equipment makers cut 700 employees, to 127,400.

Semiconductor and electronic components manufacturers located in the United States let go 5,700 people, with an aggregate of 382,800 people on the payroll as of the end of May. (These are raw BLS numbers, not ones that are seasonally adjusted.)

The BLS tucks telecommunications and data processing, hosting and related services into the same broad categories as publishing and movie-making (yeah, I know, that's dumb), but at least this area is broken out separately; in May, the data processing segment of the US economy lost 4,400 jobs, falling to 253,700 workers.

The telecom industry added 900 jobs, with an aggregate 988,300 people on the payroll, but still significantly lower than the 1.03 million people getting paychecks a year ago at telecom companies in the States. Finally, the computer systems and design and related services segment of the professional and business services sector tracked by the BLS lost 2,500 jobs, to just over 1.45 million people.

You can see the full May jobs report here (pdf). ®