a day ago
- Business
- Wall Street Journal
Signs of a Weaker Labor Market
The White House hailed Friday's jobs report for May, and it did beat market expectations with a net gain of 139,000 in payrolls. But there are signs of weakness under the labor-market hood that bear watching.
The unemployment rate stayed low at 4.2% for the third straight month. Employers are holding onto their workers despite the uncertainty over tariffs. Wage gains were also healthy, rising 3.9% over the last 12 months.
The weaker news is that the jobless rate stayed the same because some 625,000 people left the job market. As a result, the labor participation rate fell 0.2% in the month, and the employment-population ratio by a highly unusual 0.3%. Some 71,000 more people were jobless in May, and Labor Department revisions showed 95,000 fewer new jobs in March and April than previously reported.
Our friend Don Luskin of Trend Macro notes another concern, which is two months in a row of shrinking foreign-born employment. Leaving aside the legal and other problems with Joe Biden's border failures, there's no doubt that immigrant labor buoyed the job market over his Presidency. That seems to be going into reverse, as you'd expect with the Trump Administration's crackdown.
