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Bill Knudson

New Jobs and Unemployment: May 2024

Observations:


The 272,000 new jobs for May 2024----a robust total.  This dims the hope that the Fed would decrease interest rates at their next meeting June 12.  

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Compared to 1977-2020 May's 272,000 nearly came in at the top quartile.

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The Health Care sub-sector is the largest part of this category and is associated with hospitals. Turns out this sector of the economy is also experiencing the fastest-growing inflation component in the Consumer Price Index. Private Ed & Health represent 15% of all jobs but yet accounted for 32% of the new jobs. 

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  1. Introduction and observations

  2. Net New Jobs Created - recent history

  3. Job growth

  4. New Job Total Historical Comparison Using Quartiles

  5. Types of New Jobs: Totals

  6. Types of New Jobs: Growth Rate

  7. Annualized percentage job growth

  8. Types of New Jobs: Sub-Categories Growth Rate

  9. Annualized job growth

  10. Job estimates REVISED

  11. Unemployment


 

2. New job growth for May 2024 came it at a robust 272,000 compared to the prior month’s robust 175,000. May’s larger-than-anticipated total will impact the Federal Reserve as it continues it fight against inflation. The next Fed meeting is June 12.

 

3. May 2024 new job growth of 272,000 is well above the average monthly rate that has occurred since 1977, that being ~175,000. It should be noted the monthly data are volatile and as such, when using this data, it is best to use a rolling average for trend analysis.

 

4. Taking the monthly new jobs from January 1997 to March 2017 and ranking them into 4 quartiles, the May 2024 total 272,000 is just shy of the top quartile.

 

5. Private Education & Health account for 15% of all jobs in the US and in April it accounted for 32% of all new jobs. When the red bar is ABOVE the green bar, that means that the category is outperforming its relative size. Oversized performance is likely NOT sustainable.

 

6. There are 11 categories of employment. The top 4 categories account for 64% of the total. The categories are ranked in descending order. The largest bars should be on the left. Private Education and Health Services had the largest number of new jobs with 86,000. Government jobs came in with 43,000. Trade/Transportation had relatively few jobs with 27,000.

 

7. During a typical year, annualized job growth rates of 2% to 3% are normal. Rates above 4% are seldom sustainable. . New job growth in Government, Construction, and Leisure sectors materially decreased in April. What is NOT growing are jobs in Manufacturing and Finance.

 

8. Below are the more detailed listings of the top 4 categories. Health Care continues to have the largest number of new jobs in February - May. Separately, according to the Consumer Price Index, health care is experiencing the fastest inflationary rate of growth.

 

9. Health care and Day Care employment continues to run above sustainable growth levels. Contract employment was off AGAIN this month. Contract employment is usually the leading edge of future job growth. It is not known if contract employees were converted to full-time employees or not.

 

10. PRIOR PERIOD REVISION: The Bureau of Labor routinely revises prior period data as additional information becomes available over a 2-month period April was initially estimated at 175,000 and was revised downward by 10,000 in May. April’s final revision will take place on July 5 March was initially estimated at a very large 303,000 and was increased by 12,000 in April and when finalized in May, was reduced by 5,000 with the final monthly total being 310,000.

 

11. Unemployment: Weekly new Unemployment filings have settled in a range which is similar to levels that prevailed prior to COVID.


Weekly new Unemployment filings since 1977 continue to be in the low 200,000 range which is a near-record low.


The unemployment rate increased from 3.9% to 4.0% in May 2024 and continues to be slightly above the all-time low unemployment rate attained in earlier 2023.


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