According to the BLS, the U.S. economy created only 69,000 jobs in May 2012. The previous two months were revised down, the March numbers from 154,000 to 143,000 and the April numbers from 115,000 to 77,000. Although the U.S. economy is not creating enough jobs for new entrants into the labor force, the BLS claimed the unemployment rate was only 8.2%.
Early in the year, the mainstream media was filled with reports of the recovering job market and a U.S. economy on the upswing. The average reported monthly job gain was 226,000 a month in the first quarter -- a healthy amount if it were true. There was more than enough reason to believe it was not true, however. The jobs numbers are seasonally adjusted and the winter was unusually warm, meaning the usual large layoffs in industries like construction didn't take place. Nevertheless, the BLS adjusted its figures as if they had.
If the better figures in the winter were created by seasonal adjustments and not a better economy, then the spring figures should consequently be weak. This is exactly what has happened. The telltale sign can be found in the May construction employment number, down by 28,000 last month when it should have been strong.
Almost all the job gains came from only two sources last month: healthcare and social services (33,000) and transportation and warehousing (36,000). Healthcare is the only category that consistently added jobs during the Great Recession. If the BLS numbers are projected out to the distant future, almost every American in the labor force will eventually be employed in this field.
As usual, comparisons with five years ago indicate that the U.S. economy is still in serious trouble. There were almost 3.7 million fewer people employed last month than in May 2007. At the same time, the over-16 noninstitutional population has increased by nearly 11.5 million, or around 192,000 per month. Yet the BLS claims that the U.S. labor force has grown by a little over 2.2 million, or approximately 37,000 a month. There is a major disconnect between those numbers, and it indicates that a lot more Americans are unemployed than the BLS headline number indicates.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.