4.6% Unemployment = "Job Creation Slowed to a Crawl"
Posted by: Clay Waters
6/5/2006 1:50:32 PM
Good economic news came out over the weekend, but you’d hardly know it by the Times pessimistic coverage. Saturday’s “Job Growth and Wages Were Weak Last Month,” by economics reporter Edmund Andrews deemphasized the strong unemployment rate of just 4.6%.
“Job creation slowed to a crawl in May and hourly wages failed to keep up with inflation, the Labor Department said on Friday, in a report suggesting that high energy prices and higher interest rates are starting to crimp economic growth.
“The nation's employers added 75,000 jobs in May, less than half what most forecasters had expected. It was the third consecutive month of slower job growth, even though the unemployment rate edged down to 4.6 percent, nearly a five-year low.
“The surprisingly weak jobs report provoked contradictory reactions of relief and anxiety among investors -- a ‘Rorschach’ view of the economy, in the words of one analyst -- because it highlighted the ambiguities that confront the Federal Reserve.
“On the one hand, the job numbers bolstered the Fed's expectation -- and hope -- that economic growth would slow just enough to reduce inflationary pressures.”
If you think that report is unduly negative, check out the opening of the initial online filing by “continuous news desk” reporter Jeremy Peters.
“Jobs Report Signals Cooling Economy” begins: “The American economy added a surprisingly weak number of jobs in May, a sign that nervousness over a cooling economy may be spreading among the nation's employers….Anything below about 150,000 net new jobs a month is regarded as too slow to keep up with population growth, so in effect, workers are losing ground.”
Even the good unemployment rate, which reporter Andrews at least acknowledges is at nearly a five-year low, was denigrated in the Times initial reporting as an unreliable number:
“The department also reported today that the national unemployment rate edged slightly lower in May to 4.6 percent, from 4.7 percent in April. This measure is regarded by many economists as a much less reliable gauge of job creation trends, because it is based on surveys of 60,000 households, while the payroll figure reflects employment data from 400,000 workplaces. The rate also excludes workers who have given up seeking jobs.”
Peters continued: “There are signs on all fronts that the economy is softening. The once-booming housing market appears by some measures to have peaked, inflation is running at the high end of the Federal Reserve's target range and many economists think it is just a matter of time before high fuel prices begin to crimp consumer spending generally, as they already seem to have with automobile sales. Coupled with Thursday's report of strong productivity growth in the first quarter, today's jobs report may indicate that companies are bracing for a slower economy by cutting back hiring and making do with fewer employees.”
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