Yet many Americans appear more optimistic about their job prospects: 420,000 people started looking for work in May. As a result, the percentage of Americans 16 and older either working or looking for work rose to 63.4 percent from a 34-year low of 63.3 percent in April.
This is called the labor force participation rate. Higher participation can raise the unemployment rate. That’s because once people without a job start looking for one, they’re counted as unemployed.
Labor force participation has been falling since peaking at 67.3 percent in 2000. That’s partly the result of baby boomers retiring and dropping out of the workforce.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities, thinks an improving job market will lead more Americans to seek jobs. He predicts that the participation rate will level off around 63.5 percent.
The unemployment rate is derived from a survey of households, which found that more people started looking for work in May. Because some didn’t find jobs right away, the number of unemployed rose 101,000 to 11.7 million.
The job gain for the month is calculated from a separate survey of employers.
Some signs in the report suggested that the federal government’s deep spending cuts in domestic and defense programs and scant growth in much of the rest of the world are weighing on the U.S. job market. Weakness overseas has slowed demand for U.S. exports.
Manufacturers cut 8,000 jobs. The federal government shed 14,000. Both were the third straight month of cuts for those industries. Over the past three months, the federal government has cut 45,000 jobs.
The number of temporary jobs rose by about 26,000. The economy has added temporary jobs for eight straight months, suggesting that employers are responding to more demand but aren’t confident enough to hire permanent workers.
Industries that rely directly on consumer spending hired at a healthy pace — a sign of confidence that consumers will keep spending. Retailers added 28,000 jobs. Restaurants added 38,000.