On June 2nd 2017, the United States Bureau of Labor Statistics released a data that showed a sharp decline in the creation of new jobs in the month of May. The total jobs added in the economy were 138,000 which came as a disappointment for the analysts who were expecting a higher number of 185,000 to be produced in May. Still, the healthcare industry came out to be the highest generator of jobs in May with 24,300 new hires.
As mentioned by the CNBC, Douglas Holtz-Eakin of the American Action Forum stated, “The May report was a disappointment. Taken with the downward revisions, it suggests a continuation of the combination of slow GDP growth and weak productivity growth, emphasizing the need for structural reforms in tax, regulatory, and entitlement policies.”
Even when the overall job growth decreased below expectations, the healthcare industry saw a solid payroll creation in May. The total sector employment in the healthcare was boosted to 15.7 million with hospitals hiring 7,400 additional workers and 12,600 jobs being added to the sector of ambulatory care services.
There was a 16-year low at 4.3% in the unemployment rate in May which is said to be the lowest rank since May 2001. This unemployment was not good news as it occurred due to more people not looking for a work. Less participation in the labor market seemed to be a result of this decline in the labor force participation presented a 0.2 percentage point decline at 62.7%.
As reported by CNBC, Charlie Ripley of the Allianz Investment Management noted, “ May has proven to be a difficult month for payrolls in recent years as spring hiring slows down and recent college graduates have yet to enter the labor force. “While today’s number disappointed, we cannot ignore the fact that labor market conditions (are) tight and finding available workers to fill positions is becoming more difficult.”
Overall, even when healthcare industry has gained jobs in May, last year’s job growth is still higher in contrast to the recent data and jobs are growing at a much slower pace. In 2016, 32,000 new jobs were an average monthly gain in the healthcare industry as compared to the 22,000 jobs per month in the year 2017.
Apart from some disappointing news, there was good news that was also part of the report. Americans were found to be earning more in wages with the past 12 months seeing as the hourly rose of 2.5%. Jim O’Sullivan who is working as a chief U.S economist at High-Frequency Economics told the CNN, “I don’t think there’s any reason to expect hiring will hit a wall. It’s just part of the ups and downs from month to month.”
Experts shared different views on the report with some calling it a decline in job growth due to a huge drop in unemployment after three years of gains in a job. While others did not find the numbers in job gains and unemployment worrisome as monthly job numbers can be sluggish and can always go through a revision.
In the future, the healthcare sector is predicted to lose 2.9 million jobs if the GOP bill gets to repeal and replace the Affordable Care Act (ACA). With a GOP bill in effect, there will be a huge impact on ACA provisions such as on Medicaid expansion and premium tax credits, causing a sharp decrease in healthcare hiring.