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Real Estate

National Hiring Streak Continues in May

Source: https://www.realpage.com/analytics/national-hiring-streak-continues-may/

The U.S. economy added more jobs in May than economists predicted amid historically low unemployment, historically high inflation, and rising interest rates.

Roughly 390,000 employees were added to payrolls in May 2022, according to the Bureau of Labor Statistics (BLS). That was well above the roughly 325,000 positions forecasted by experts. However, revisions to March and April combined showed 22,000 fewer jobs were added in those months than previously reported. As a result, the nation’s total job count in May was 822,000 jobs, 0.5% below the pre-pandemic level from February 2020. Meanwhile, the U.S. unemployment rate in May held steady at 3.6%, at one of the lowest levels in over 50 years.

Jobs by Industry

The jobs recovery in May was fairly broad-based, with the service-providing industries adding 274,000 jobs and the goods-producing industries adding 59,000 for the month. Notable job gains occurred in Leisure and Hospitality Services (+84,000), Professional and Business Services (+75,000) and Education and Health Services (+74,000). Meanwhile, the Trade, Transportation and Utilities industry (+1,000) saw little movement, with job gains in transportation and warehousing offset by deep losses in trade.

• Roughly 80% of the Leisure and Hospitality industry’s monthly gain of 84,000 jobs consisted of positions in the food services and drinking places (+46,100) and accommodation (+21,400) subsectors. The arts, entertainment and recreation sector added 16,200 jobs for the month, with 10,200 of those in the performing arts and spectator sports subsector. Despite the recent job additions in Leisure and Hospitality Services, employment in this sector is still down by 1.3 million workers, or 7.9%, compared to the pre-pandemic level from February 2020.

• The Professional and Business Services industry gained 75,000 jobs in May with most of those in the professional and technical services sector (+48,200). The lower-paying administrative and waste services sector added 20,100 jobs, with the temporary help services subsector accounting for 19,300 of those jobs. As of May, Professional and Business Services had 821,000 more jobs than in February 2020.

• The Education and Health Services industry’s monthly gain of 74,000 jobs was largely in the health care and social assistance sector (+42,100), with much of that gain in health care (+28,300) dominated by ambulatory health care services (+6,400). Meanwhile, the educational services sector added 32,500 jobs in May. Total employment in Education and Health Services is 340,000 jobs, or 1.4%, lower than in February 2020.

• The Government sector added 57,000 jobs in May. Most of that net job gain was in the State Government sector (+36,000), with the state government education subsector contributing 36,300 jobs. Local Government added 16,000 jobs during the month, with most of that increase in local government education (+14,400). The Federal sector added 5,000 jobs, with the U.S. postal service subsector down 3,800 jobs.

• The Construction industry added 36,000 jobs in May with a gain of 17,400 jobs in the specialty trade contractors sector, followed by heavy and civil engineering construction (+11,300). Construction employment is up by 40,000 jobs compared to February 2020 levels.

• The Manufacturing industry’s gain of 18,000 jobs in May was fairly split between durable (+11,000) and nondurable (+7,000) goods. Among durable goods, strong gains were recorded in fabricated metal products (+7,100), while there were notable losses in transportation equipment (-7,900). Job gains in nondurable goods manufacturing were mainly in food manufacturing (+6,100) and chemicals (+3,700), while the job count was down in miscellaneous nondurable goods manufacturing (-2,900). Employment in Manufacturing overall is 17,000 jobs, or 0.1%, below the February 2020 level.

• The Information industry added 16,000 jobs in May, with the majority of those gains in the motion picture and sound recording industries sector (+10,600). The data processing, hosting and related services sector (+5,200) had a solid contribution as well. Job losses were recorded in the telecommunications (-1,400) and publishing industries (except Internet) (-400) subsectors.

• The Other Services sector added 16,000 jobs in May. The largest contribution to that total was from the personal and laundry services subsector, which added 6,800 jobs. Repair and maintenance added 5,900 jobs and the membership associations and organizations subsector added 4,000 jobs for the month.

• The Financial Activities industry added 8,000 jobs in May with much of that gain coming from the real estate and rental and leasing sector (+14,000), while finance and insurance was down 6,400 jobs for the month.

• The Mining and Logging industry gained 5,000 jobs in May, with most of that net gain in the support activities for mining (+3,400) and mining (except oil and gas) (+2,300) subsectors. Logging was down 500 jobs for the month.

• The Trade, Transportation and Utilities industry posted a net gain of just 1,000 jobs in May with notable gains in transportation and warehousing (+52,000) offset by deep losses in trade (-46,600). The downturn in trade was due to loses in retail trade (-60,700) led by general merchandise stores (-32,700). On the other hand, wholesale trade added 14,100 jobs for the month with durable goods accounting for 10,400 positions. Utilities was up just 500 jobs for the month. Overall employment in Trade, Transportation and Utilities is 819,000 jobs above the February 2020 level, led by strong growth in warehousing and storage (+482,800).

Unemployment

The unemployment rate (U3 or headline unemployment rate) in May remained at 3.6% for the third month in a row, just 10 basis points (bps) above the February 2020 showing, which was the lowest level in more than 50 years. At 3.5%, the February 2020 rate was the lowest level since 1969. The unemployment rate has not fallen below 3% since 1953.

As of May, the total number of unemployed persons was essentially unchanged at nearly 6 million.

The unemployment rate for adult men decreased 10 bps from April to 3.4% in May, while the rate for adult women increased 20 bps month-over-month to 3.4%. The unemployment rate for teenagers rose 20 bps from April to 10.4% in May.

Across most major industries, unadjusted unemployment rates rose or were essentially unchanged from April to May. The biggest increases were in Transportation and Utilities, and Mining, both up 70 bps to 4.1%. The unemployment rates in Leisure and Hospitality Services (5.1%) and Education and Health Services (2.5%) were both up 30 basis points. Also recording higher unemployment rates were Government (1.7%) and Information (2.9%), both up 20 bps. On the other hand, unemployment rates improved in Construction (down 80 bps to 3.8%), Manufacturing (down 40 bps to 2.8%) and Other Services (down 20 bps to 3.1%). All other major industries saw little to no change in unemployment rates from April to May.

The highest industry unemployment rates (not seasonally adjusted) in May were in Leisure and Hospitality Services (5.1%), followed by Wholesale and Retail Trade (4.2%). The lowest unemployment rates were in the Government (1.7%) and Financial Activities (1.9%) sectors.

The number of unemployed persons that quit or voluntarily left their previous job to begin looking for new employment decreased from 793,000 in April to 764,000 in May. The number of unemployed for 27 weeks or longer edged down, from 1.48 million in April to 1.4 million in May and accounted for 23.2% of all unemployed persons. The number of those working part-time that would prefer to work full-time rose by 295,000 from April to about 4.33 million in May, while the number of workers who prefer part-time positions decreased by 20,000 to around 20.8 million.

The U6 unemployment rate (seasonally adjusted), which includes part-timers for economic reasons and marginally attached workers, inched up to 7.1% in May compared to 7% the previous month and 10.1% a year earlier.

Labor Force Participation

The civilian labor force participation rate increased 10 basis points (bps), moving from 62.2% in April 2022 to 62.3% in May 2022. That recent rate was well below pre-pandemic levels which averaged 63.1% in 2019. The employment-population ratio also increased, inching up to 60.1% in May from 60% in April.

Workers marginally attached to the labor force decreased by about 150,000 from April to 1.47 million in May, while the number of discouraged workers stood at 415,000, down 41,000 month-over-month. Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate they want and are available for a job and have looked for work sometime in the past 12 months.

Average Hourly Earnings

Despite the influx of lower-paying service jobs in May, average hourly earnings rose $0.10 during the month. That monthly increase took average hourly earnings to $31.95 in May, the eighth consecutive month above $31. On an annual basis, average hourly earnings were up $1.59, a 5.2% increase year-over-year. However, wages were outstripped by inflation, as the Consumer Price Index rose 8.3% in the year-ending April.

Industry wage growth varied greatly. Leisure and Hospitality Services wages jumped 11.8% year-over-year in May, as competition for fewer restaurant and other service workers has had a dramatic effect on wage growth. Transportation and warehousing workers enjoyed an 11.4% annual increase in hourly wages. Professional and Business Services employees posted a 7% year-over-year increase, similar to the upturn of 6.9% among Education and Health Services workers. Most other industries averaged 4% to 6% increases. Meanwhile, Information employees registered a mere 0.5% annual increase.

Telework

The percentage of workers that telework continued to fall in May as more companies are welcoming workers back into the office. April’s teleworking rate of 7.4% was below the 7.7% rate recorded in April 2022 and well below the 35.4% rate recorded in May 2020, according to the BLS’s supplemental data measuring the effects of the coronavirus pandemic on the labor market. The metric does not include employees who worked from home prior to the pandemic. The rate of teleworking will likely continue to remain elevated compared to historical norms as employers discover that remote working can act as a hiring and retention inducement that boosts employee morale while productivity remains close to previous levels.

To learn more about the data behind this article and what RealPage has to offer, visit https://www.realpage.com/.

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Advan provides hedge funds and institutional investors with unmatched insights into both foot and vehicle traffic to enable better investment decisions. Using precise, manual geofencing, it has the most extensive and accurate location data, available in seconds through an intuitive, self-service dashboard. Its institutional-grade analytics allow fast and actionable insights into customer behavior and corporate activity.

Advan is headquartered in New York City. For more information please visit www.advan.us