So as not to be accused of “burying the lead,” the journalistic phrase for missing the story, here it is: Friday’s employment report was not as positive the headline number –showing fewer job losses in May than in April – would suggest. 

For starters, the overall job numbers look better in part because the Census Bureau, gearing up for the 2010 population count, added about 70,000 jobs. Without that addition (66,000 in April), payroll jobs dropped over 400,000 in May – still an improvement over recent months. And, while fewer jobs were lost in May than in any month since September 2008, that’s not the whole story. Consider: 

• The number of people working – which differs from the number of jobs – fell 437,000 to 140,570,000 the lowest level since February 2005.
• Since the recession began in December 2007, payrolls are down 6,001,000 – a decline of 4.3%; during the July 1981-November 1982 recession, jobs fell 3.1%
• The unemployment rate increased to 9.4%, the highest level since September 1983 (9.2%); the unemployment rate is up 3.9 percentage points from 5.4% in May 2008. The year-year increase matched April as the largest since May 1974-May 1975.
• Since the recession began, the unemployment rate has increased 4.5 percentage points.
• The employment-population ratio, measuring the percentage of the over-16 population with jobs, remained at 59.7% (40.3% without jobs) – the lowest since October 1984. In the last year the employment-population ratio is down 2.8 percentage points, matching January and March for the largest decline since 1953-54.
• The number of people (16 years of age and older) unemployed – out of work and looking for a job – increased 787,000 in April to 14,511,000 – the highest level on record. According to the most recent report from the Department of Labor on unemployment insurance about 9.0 million people are collecting benefits (under regular and extended programs) which means more than five million people are unemployed but not receiving any unemployment benefits.
• Since the recession began, the number of people unemployed has increased 6.97 million; the number of people unemployed in November 2007 (the recession began in December 2007) was 7,212,000
• Private sector payrolls fell 338,000 in April, the 17th consecutive monthly decline but a sharp improvement from April when private sector payrolls fell 596,000.
• Average weekly earnings – a function of average weekly hours and average hourly earnings – FELL 0.4% in May, as average hours dropped to a new record while average hourly earnings went up just 2¢. The month-month decline in earnings was the steepest since June 2004.
• Average weekly earnings are up just 1.1% in the last year, the slowest year-year gain since January 1996.
• Aggregate monthly earnings (based on number of people employed and average earnings) fell 0.7% from April and are off 2.7% in the last year, the fifth straight month of year-year declines. Until January, aggregate earnings had never fallen year-year (BLS began tracking earnings in 1964.
• The unemployment rate for college graduates rose to 4.8% (from 4.4% in March) more than twice the 2.3% unemployment rate in May 2008.

There were, to be sure, some positives in Friday’s report in addition to the headline jobs number: 

• The number of private sector jobs lost was the lowest since September.
• Health care hiring, which had fallen off in April, improved in May.
• Job losses in the temporary employment sector slowed markedly; temporary jobs are an entry point into the job market.

Those positives are matched by concerns:

• Continuing job cuts among loan underwriters suggests banks will be constraining lending and mortgage loans / modifications will either be tougher to get or take longer.
• The soaring unemployment rate among college graduates.
• The gap between the number of people unemployed and those collecting unemployment insurance widened to more than 5,000,000

We will see the impact of the jobs report in other data to be released in the next couple of weeks:

• Retail sales will remain under pressure as will bank lending.
• The continuing increase in the unemployment rate for college graduates could point to further mortgage delinquencies and foreclosures; Homeownership correlates with higher education, according to the Mortgage Bankers Association, suggesting still more foreclosures.
• The increase in the number of people unemployed means further drains on state unemployment insurance funds.

In other words, “it ain’t over ‘til it’s over.”

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.