Employment situation from Bureau of Labor Statistics as of May 2023.

In May 2023, the labor market exhibited signs of cooling down, reflecting the lagged nature of labor data and its implications for the overall state of the U.S. economy. The question arises as to whether the U.S. economy can achieve a soft landing.

The chart below provides insights into the current state of the labor market. The labor force participation rate stands at 62.60%, indicating a gradual increase. However, it remains below pre-pandemic levels. Similarly, the employment-population ratio is at 60.30%, also on a rising trend but still below pre-pandemic levels. 

On a concerning note, the unemployment rate has risen from 3.4% last month to 3.7%. This increase suggests that the labor market is starting to reflect the impact of the Federal Reserve's tightening monetary policy measures. This shift in policy may have contributed to a slight rise in unemployment. It is important to closely monitor these trends to gauge the overall health and stability of the labor market as monetary policies continue to evolve.

Datasets as of May 2023, obtained from the Bureau of Labor Statistics (BLS), the employment situation can be summarized as follows:

Level Data - Percentage Change from Previous Year (May 2022 to May 2023):

- Population Level: There has been an increase of approximately 1.11% in the population.

- Civilian Labor Force Level: The civilian labor force has grown by around 1.55%.

- Employment Level: Employment has increased by approximately 1.53%.

- Unemployment Level: The number of unemployed individuals has risen by around 1.97%.

- Not in Labor Force: The number of individuals not participating in the labor force has seen a modest increase of approximately 0.40%.

- Not in Labor Force - Want a Job Now: However, there has been a notable decline of around 3.54% in the number of individuals not in the labor force but actively seeking employment.

The chart below illustrates the percentage changes from the previous year, specifically from May 2022 to May 2023. During this period, there was an upward trend in labor force participation, indicating an increase in the number of individuals actively engaged in the labor force. However, it is important to note that the rise in the unemployment level outpaced the growth in employment, resulting in a higher number of individuals classified as unemployed compared to the previous year.

Level Data - Percentage Change from Previous Month (April 2023 to May 2023):

- Population Level: There has been a slight increase of approximately 0.07% in the population.

- Civilian Labor Force Level: The civilian labor force has grown by around 0.08%.

- Employment Level: However, there has been a decrease of approximately 0.19% in the number of employed individuals.

- Unemployment Level: The number of unemployed individuals has seen a significant increase of around 7.78%.

- Not in Labor Force: The number of individuals not participating in the labor force has experienced a small increase of approximately 0.05%.

- Not in Labor Force - Want a Job Now: Furthermore, the number of individuals not in the labor force but actively seeking employment has shown a notable increase of around 3.91%.

The chart below highlights the changes in the unemployment level from the previous month (April 2023) and reveals a significant increase of 7.78%. In contrast, the employment level experienced a much smaller growth of only 0.19%. These findings indicate that during May 2023, more individuals faced layoffs or job losses compared to those who successfully found new employment opportunities.

Source: https://www.bls.gov/news.release/empsit.nr0.htm