Nearly all of the jobs added in May were Census-related
By Kevin Smith, Staff Writer© Pasadena Star-News, June 4, 2010
The nation gained 431,000 new jobs in May but nearly all of those positions were tied to temporary hiring for the U.S. Census count, the Labor Department said Friday.
Hiring by private companies accounted for only 41,000 of the jobs, down from 218,000 in April.
The news rattled investors and pushed the Dow Jones industrials below the 10,000 mark for the second time in two weeks.
The Dow fell 323 points - its second worst slide of the year - to end the day at 9,932. All of the major indexes finished down more than 3 percent, and concerns about Hungary pounded the euro to a four-year low.
"This seemed to come out of nowhere," said Christopher Thornberg, a founding principal with Beacon Economics in Los Angeles. "I was very surprised by the numbers this morning because all of the signs have been that the economy is moving forward at a good clip."
Thornberg said he'd been expecting a much larger job gain among private employers.
"It doesn't bode well," he said. "In the longer term people need to get back to work and start this economy moving again. That would take some of the pressure off the system ... but that doesn't seem to be happening."
On paper, the 431,000 new jobs accounted for the biggest gain in a decade. The unemployment rate dipped to 9.7 percent from 9.9 percent. But that was mainly because hundreds of thousands of people gave up searching for work and were no longer counted.
All told, 15 million people were unemployed in May.
Counting people who have given up looking for work and part-timers who would rather be working full time, the "underemployment" rate fell to 16.6 percent in May from 17.1 percent in April.
The economic downturn has cut heavily into the profits of companies across the board, prompting many to consolidate, revamp their operations or shut down completely.
Toy giant Mattell Inc., which has maintained a distribution facility in Industry for nearly 40 years, announced earlier this year that it will shutter the center this summer and move the operation to San Bernardino.
That will put 100 employees out of work.
The San Gabriel Valley suffered another blow last year when Gregg Industries, an El Monte foundry, closed its doors, putting another 200 people out of work. And scores of auto dealerships throughout the Valley and Whittier areas have gone out of business, creating additional layoffs.
But the employment picture isn't all bad. Wal-Mart announced Friday that it is positioning itself for 20 years of worldwide growth and plans to hire half a million workers over the next five years.
Employers across a range of industries last month added jobs at a slower pace, or cut them. Factories, professional and business services, leisure and hospitality companies, and education and health care firms all slowed hiring.
Financial services, construction companies and retailers all pared jobs.
The federal government led the way in hiring last month, but only 1,000 of the 412,000 positions were not Census-related.
Still, Thornberg figures the employment picture might not be as dire as some think.
"These numbers are subject to revision, so they may not be as bad as initially thought," he said. "I think they'll end up revising these numbers up."
The most recent figures for Los Angeles County show that the county's unemployment rate held steady at 12.3 percent in April.
Some local cities are still posting high jobless rates, but fortunately they've eased downward.
El Monte's unemployment rate fell to 14.7 percent in April from 15.1 percent the previous month, and Whittier dropped to 8.6 percent in April compared with 8.8 percent in March.
Gary Kaplan, president of Gary Kaplan & Associates, a Pasadena-based executive search firm, said May wasn't good for him or virtually anyone else he's talked to.
"It's really interesting because from September of 2009 through April of this year we've seen steady improvement in our business," he said. "By the end of the first quarter of this year our numbers were up about 81 percent. But May just fell off a cliff."
Kaplan said stock market volatility in recent weeks may have spooked employers and dissuaded them from hiring.
"I would love to have a really positive perspective, but this could just be an indication that we are collectively not out of the woods yet," he said.
The Associated Press contributed to this story.
