Jobs are available, but many of them aren’t so good

The U.S. Department of Labor has released its monthly jobs report, which indicates how employers are behaving.

The upshot: yes, there are jobs available, but some major industries are suffering and a continuing rise in part-time work, the quality of jobs isn’t very high.

What the latest jobs report tells us about who’s working in America

First, the overall view: job creation is not as strong as economists had hoped, which means the economy isn’t as strong as it should be.

How do we know that? Because fewer new jobs are being created. When the economy is strong, and companies feel confident, they create more jobs. That’s not the case now, or for the past two months.

For instance, although many economists expected 185,000 jobs to be added in May, only 138,000 jobs were added. In more bad news, the Labor Department said it had overestimated its initial March and April job growth estimates and was off by 66,000 jobs for the two months.

Which industries are up, and which are down

Second, some major industries are suffering. Retailers lost 6,100 jobs in May, continuing the trend of brick-and-mortar stores being in freefall because more Americans are shopping online.

Although there were promising job increases in healthcare and mining, that strength stands out because other industries are so weak.

On Thursday, consultancy firm Challenger, Gray & Christmas reported that grocery stores and the automotive industry were being impacted by job cuts. Michael Kors announced Thursday that it is closing about 100-125 stores over the next two years to save costs.

What’s causing the job destruction in retail? Right now, people prefer to shop online more than they did in the past. Even though online shopping is less than 10% of all shopping, it’s enough to hurt the stores and the people who work there.

And it’s only going to get worse. When online technology can give you price transparency at the click of your fingers, it makes in-person sales obsolete.

“The consumer has an amazingly efficient and effective mechanism to discover what prices are and to make a virtually snap judgment about what they’re willing to pay for such things and that has shifted the balance of power to consumers away from retailers and producers,” Mark Hamrick, senior economic analyst at, said. “There’s still going to be brands like Apple and Tesla…that continue to be capable of commanding premium prices but it’s harder and harder.”

People are dropping out of the workforce, but where are they going?

Hamrick said that overall, the May jobs report was a “big disappointment” and that the job numbers showed that “the recent past hasn’t been as strong as we thought it was.”

On the plus side, the unemployment rate stayed steady at 4.3%, the lowest it’s been since 2001.

This all sounds good on the surface — until you see that the labor force participation rate fell too. Labor force participation is a measure of how many people are working; when the number drops, it means they’re dropping out of the work force. That’s what’s happening now. More people are not looking for work and are not rejoining the job market. The labor force participation rate declined by 0.2% to 62.7% in May as about 429,000 people dropped out of the labor force.

It’s a firm trend: labor force participation has been dropping since 2000, as this chart from Business Insider shows. 

There are no clear answers about exactly why and which Americans are disappearing this month, and if this is out of the ordinary. The obvious suspects are Baby Boomers, who are of retirement age, but women and young workers are also dropping out of the payrolls.

“There’s nothing that’s going to compel baby boomers to stop retiring even if they’re underfunded for retirement…And for the most part, high school students are continuing to stay in school and go to college,” Hamrick explained. “Between those [factors] and the fact that females are not contributors to the labor force participation like they were in years past, those are all demographic reasons that aren’t changed by a day’s or month’s or year’s worth of headlines on employment.”

This make sense. More Americans are going to college than ever before and are not joining the job market until later. Moreover, the U.S. not having mandatory paid family leave disproportionately hurts women when it comes to employment.

Some economic analysts also believe that labor force participation rate’s slump is due to the job market being at full capacity: everyone who wants a job currently can find one. That’s an optimistic view, but one that’s hard to prove.

So, jobs are there but are they may not be good enough for people to want them.

If we want to compel more people to join the job market, we could entice them with more job training and higher wages, but growth in average hourly earnings remains sluggish. Wages increased by just four cents last month to $26.22 an hour.