The headline jobs report on Friday was disappointing, as temporary Census workers accounted for almost all of the 431,000 of May’s increase in payroll jobs. As the economics team at PNC put it, the jobs report was “all frosting, no cupcake.”
The household survey provided a little more substance, as the headline unemployment rate fell to 9.7% in May from 9.9%. More encouraging, the U-6 measure of underemployment (which includes not only those who are unemployed but also marginally attached workers and those who are part time for economic reasons) fell sharply. The underemployment rate was 16.6% in May, down from 17.1% a month earlier (and from its peak of 17.4% last October):
As you can see, the headline unemployment rate (U-3) and the underemployment rate (U-6) have been moving sideways or slightly downward over the past eight months. That’s a step in the right direction after the sharp increases in 2008 and 2009. But we have a very long way to go.