Private Hiring 'Weak,' 411,000 Jobs Out of 431,000 Temp Census Positions

The Bureau of Labor Statistics released its monthly jobs report on June 4, showing only 41,000 new private-sector jobs. But those jobs were overshadowed by the enormous number of temporary census jobs in the May data.

According to the report, "employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010." Those Census jobs made up 95 percent of the total payroll employment growth.

Even then, the hiring fell short of expectations. Associated Press said that economists forecasted 513,000 jobs for the month and called it a "disappointing" report. "Hiring by private employers was particularly weak, which is raising concerns that the economy recovery remains slow," AP said.

Other news outlets hyped the report including CNN. On its website, CNN emphasized that the "flood of temporary Census workers in May led to the biggest jump in jobs in ten years."  A similar headline appeared on the crawler at the bottom of CNN the morning the jobs report was released.

New York Daily News, ABC and others also emphasized the "fastest pace" of job creation in 10 years in their reports.

On June 3, investing website Motley Fool advised people to ignore the jobs report that was supposed to show "the largest jump in more than 10 years."

"Ignore it. The overwhelming majority of these job gains are temporary hires from the Census Bureau's decennial census report and almost all of them will reverse within the next three months," Motley Fool wrote. They explained that the numbers would not be normalized and therefore "irrelevant when judging where the economy is truly heading."

On June 2, President Obama claimed the U.S. economy was "moving in the right direction," and that "we expect to see strong job growth in Friday's report." Vice President Biden predicted 100,000 to 200,000 jobs per month through 2010, during an interview with Charlie Rose June 2. Even if that happens, the president would fall 5.2 million short of fulfilling his jobs pledge about economic stimulus.

Stock market futures dropped in response to the jobs report.

"Given these disappointing numbers, it does look like we're headed for a re-test of the lows from last week," when the Dow posted its first close below 10,000 since February, Peter Cardillo, chief market economist at Avalon Partners, told the Wall Street Journal. "The trend in private-sector jobs is still moving in the right direction here, but the pace is really anemic. Of course, that means people have to take another look at their profit forecasts and everything else."

By adding just 20,000 total permanent jobs, the economy actually lost ground since most economists say it takes at least 100,000 jobs each month to keep up with population growth.

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Julia A. Seymour's picture