The Issue: More jobs, more people looking for jobs

Happy days may not yet be here but they're getting closer based on last week's unemployment statistics.

The Labor Department's Bureau of Labor Statistics Friday reported the economy added 175,000 non-farm jobs in May -- not great but better than recent months -- and the unemployment rate crept up 0.1 percentage points from April to 7.6 percent, indicating more people are looking for jobs.

The number of people currently employed increased to 155.7 million, with 420,000 people leaving the sidelines for the scrum on the field.

"Today's employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression," Alan B. Krueger, chairman of the Council of Economic Advisers, said in a statement, noting 972,000 private sector jobs have been added this year.

It was a good month for professional services, which added 57,000 jobs, albeit 25,600 of them temporary. Bars and restaurants hired 38,100 more people and retail added 27,700 jobs. Education and health services added 26,000 jobs while construction added 7,000. The federal government trimmed its payroll by 9,400 jobs while local governments, which had been shedding employees, added 13,000.

"Employment in other major industries, including mining and logging, construction, manufacturing, wholesale trade, transportation and warehousing, and financial activities, showed little or no change over the month," BLS reported.

Still, 11.8 million remain unemployed, with 4.4 million considered long-term unemployed -- out of work for 27 weeks or more. The good news is that's about 1 million fewer long-term unemployed than last year.

Nearly 8 million people are working part-time when they'd rather be working full-time, BLS said. About 2.2 million people were marginally attached to the labor force (sort of looking for work but only occasionally) and 780,000 have given up altogether.

"The latest employment report revealed a job market that is most definitely improving. That is, unless you are under the age of 20 or you have been out of work for more than six months. Youth and long-term unemployment are not only inflating the unemployment rate, but they are a drag on the economic recovery," Chicago outplacement firm Challenger, Gray & Christmas said.

Adult men had a 7.2 percent unemployment rate, compared to 6.5 percent for women and 24.5 percent for teenagers. Among whites, 6-point-7 percent were jobless, while 13.5 percent of blacks and 9.1 percent of Hispanics were out of work. Asian unemployment was 4.3 percent.

"Overall, employers are not hiring fast enough to satisfy the pent-up demand for jobs," the National Employment Law Project -- a non-profit organization that advocates for job creation -- said in a statement. "Perhaps just as significantly, those lucky enough to find jobs are not being paid enough to fuel more robust employment gains. Throughout much of the recovery to date, the vast majority of jobs being created pay low wages, one of the reasons the recovery continues to be sluggish."

BLS pegged average hourly earnings in May at $23.89 up 46 cents from last year. In the private sector, wages averaged $20.08, up a penny from April. The average workweek was 34.5 hours.

"In an economy still driven largely by consumer demand and consumption, if jobs don't pay enough for working families to afford the basics, workers can't spend enough to drive a faster pace of economic growth. But when low-wage workers get a raise, we all benefit," NELP Executive Director Christine Owens said.

"It's a problem when people can't afford even the most modest purchases. Raising pay puts money in workers' pockets and enables them to 'splurge' on eating out occasionally, summer camp and new school clothes for their kids. These simple expenditures may not seem to pave the road to a strong and resilient economy but for millions of underpaid Americans and the economy overall, higher wages would not only enable these simple purchases but would also generate the demand we need to kick-start a virtuous cycle of higher wages leading to more consumption leading to more jobs."

John Challenger, chief executive officer of Challenger, Gray & Christmas, said if politicians are "truly concerned about reigniting the economy and fixing the deficit, getting [the long-term unemployed] back on payrolls should be the top priority. He said while 16- to 19-year-olds represent less than 4 percent of the civilian labor force, they account for nearly 12 percent of the unemployed.

"Teenagers typically earn less, but they are more likely to spend a greater portion of their earnings on food, clothes, entertainment, etc. Ironically, these are the same areas that usually provide teenagers with the most job opportunities," Challenger said. "Unfortunately, due to slow job growth in higher-skilled, higher-paying occupations, the jobs that would normally be filled by teens are being filled by recent college graduates, stay-at-home mothers returning to the workforce, and seniors."

NELP, Krueger and economist Peter Morici of the University of Maryland agree the sequester -- those across-the-board budget cuts that kicked in earlier this year -- are putting a damper on the economy.

"With all this fiscal drag, economists expect growth to slow to less than 2 percent in the second quarter, and jobs creation is likely to slow through the spring and summer," Morici warned. "With southern Europe's depression dampening continental demand for goods made in Germany and other northern states, the prospects for U.S. exports and cut-priced competition from Europe in U.S. markets is heating up -- growth and jobs creation could stay depressed for a long time."

And, Morici said, there is little more the Federal Reserve can do to goose the economy.

"More rapid growth requires importing less and exporting more -- dealing with the $450 billion trade deficit on oil, by drilling more offshore and in Alaska, and with China, by addressing its undervalued currency and protectionism," Morici said.

"Faster growth also requires right sizing business regulations to make investing in new jobs less expensive and time consuming. Regulatory enforcement is needed to protect the environment, consumers and financial stability but must be delivered cost effectively and quickly to add genuine value."