The nation’s jobless rate jumped to 5.5 percent in May, the Bureau of Labor Statistics reported this morning, as the number of job seekers rose by 861,000 to a total of 8.5 million. Employers shed a net 49,000 jobs for the month, with the 34,000 construction jobs lost accounting for more than three-fifths of that decline.
Since job growth crossed into negative territory in January, total employment has now plunged for five straight months, dropping thousands of jobs each month.
The employment situation is particularly challenging for builders and related workers. Construction employment is down by more than 475,000 jobs since its peak in September 2006, said BLS Deputy Commissioner Philip Rones, with two-thirds of those job losses (320,000) occurring in the past seven months. May’s losses continued to be concentrated in the home building sector, with residential building shedding 6,300 jobs and residential specialty trades shedding 18,800, for a combined total of 25,100 jobs. (Nonresidential construction employment also dropped by 5,900, but nonresidential specialty trade jobs actually inched up by 700.)
On the plus side, the health care and education sector added 54,000 jobs in May, while government employment rose by 17,000 and the leisure and hospitality employers added 12,000 jobs. But these gains could not overcome losses in construction, manufacturing, retail, transportation, and professional and business services.
As the nation’s economic woes continue, the ranks of the long-term unemployed continue to grow. The number of individuals who have been unemployed for 27 weeks or longer stood at 1.6 million in May, up half a million from one year ago. (A measure to extend federal unemployment benefits for an additional 13 weeks, which backers say is a quick way to stimulate the economy, passed the U.S. Senate last month as part of an Iraq war funding bill. But the Democratic leadership in the House of Representatives has said they will probably drop this item from the bill to avoid a possible presidential veto.)
Unemployment among Latinos hovered at 6.9 percent in May for the third straight month, with about 1.5 million seeking work out of a labor force of just over 22 million. Hispanic construction workers, who benefited strongly from the home building boom, have been hit correspondingly hard by the present slump in building. A report released by the Pew Hispanic Center on Thursday notes Hispanic unemployment declined from its 2003 peak of 8.0 percent to just 4.9 percent in late 2006, which is only a half a point higher than the overall 4.4 percent unemployment rate. But as the home building industry has slumped, Hispanic fortunes have reversed, and the gap is widening again. By April, Latino unemployment was 1.7 percent higher than the national rate.
Hispanic-owned restaurants and retail stores that cater to Latinos have seen slumping sales. And Hispanic homeowners also are more likely to have subprime, adjustable-rate mortgages, which adding to the risk that they will lose their homes as well as their jobs as housing continues to slump.
Ted Cushman is a contributing editor to BUILDER magazine.