Meta Description: Each month, Mployer Advisor breaks down the Bureau of Labor Statistics’ most recent State Employment and Unemployment Summary to highlight some employment trends across various markets. This is an overview of May’s report. 

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The Market Employment Summary for May 2024

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Editor's Note: This report is based on survey data from April 2024 that was published in May 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

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As the national unemployment rate ticked back up a tenth of a point to 3.9%, only 2 states actually recorded an increase in their internal unemployment rates - Florida and Maryland, both of which saw their unemployment rates climb by plus 0.1%.

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5 states actually saw their unemployment rates decrease while the remaining 43 states and Washington DC saw no meaningful change in unemployment over the month. 

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In total only 5 states plus Washington DC have unemployment rates that are above the US national average of 3.9%, while about 24 states have unemployment rates that are below the national average.

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Although US employers added a sturdy (albeit below trend) 175 thousand new jobs to their payrolls last month, only 6 states registered a net increase in jobs, led by Florida and Missouri, while payroll figures in the remaining 44 states and Washington DC remained largely unchanged from the month before.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for May 2024.

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States With the Highest Unemployment Rates

For the third month in a row, California has recorded the highest unemployment rate which has been hovering at 5.3%. 

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Washington DC had the next highest unemployment rate, coming in at 5.2% for the second consecutive month, followed by Nevada at 5.1%. 

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Illinois, New Jersey, and Washington state aren’t far behind at 4.8%, 4.7%, and 4.8% unemployment, respectively, with all other states coming in at or below the US national average of 3.9%.

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Over the course of the last year, about 60% of states have seen an increase in their unemployment rates, led by Rhode Island, Connecticut, and Washington state, which saw their in-state unemployment rates rise over the last 12 months by 1.4%, 1.1%, and 1.0%, respectively, while 27 other states saw increases of less than 1% over the year. 

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States With The Lowest Unemployment Rates

For the fourth month in a row, North Dakota and South Dakota have had the lowest unemployment rates, this time tied at 2.0%, followed by Vermont at 2.1%.

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In total there are 24 states that have unemployment rates below the US national average, 15 of which register below 3.0%.

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Of the 5 states that recorded a reduction in unemployment rate last month, Virginia at minus 0.1% was the only state to record less than the 0.2% reductions recorded by Arizona, Maine, Mississippi, and Montana. 

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Over the course of the last 12 months, Massachusetts was the only state that saw a net decrease in unemployment rate at minus 0.3%.

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States With New Job Losses

No states saw statistically significant job losses last month/year.

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States With New Job Gains

A total of 6 states saw their payrolls increase last month.

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Florida claimed the largest number of new jobs added at about plus 45 thousand - closely followed by Texas at about plus 43 thousand. 

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The largest percentage gain of net jobs, however, went to Missouri at plus 0.6% (almost 17 thousand net new jobs) over the month, followed by Floida at plus 0.5% and Alabama at plus 0.4% (about 9 thousand net new jobs). 

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Over the last 12 months, Texas netted the most jobs at just over 300 thousand, followed by Florida and California at about 240 thousand and about 200 thousand, respectively, while South Carolina and Nevada netted the largest percentage increase in jobs at 3.4% apiece. 

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31 states in total have seen their jobs figures increase over the last year. 

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Mployer Advisor’s Take: 

Inflation fell to a 3.4% annualized rate in April, which led to rallies in the markets at least in part on the revived hope that this kind of report may inspire the Fed to implement a decrease in interest rates sooner than later.

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The Fed had previously signaled that potentially 3 interest rate cuts were penciled in for 2024, but unexpected inflationary spikes - despite being mild and short-lived - had made those cuts seem increasingly less likely as the year has progressed. The latest inflation data, however, has many observers speculating that the rate cuts are more likely back on the table.

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Not everyone is convinced, however, that the inflationary tides have yet turned, including JPMorgan CEO who has been outspoken in recent days claiming that the inflationary forces will likely have longer staying power than most people, including economists, are expecting.

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Perhaps even more tellingly, consumer confidence recently hit its lowest level since 2022, dropping below the baseline of 100 down to 97 - pretty much exactly where it was in the summer of 2020 when similar considerations about the economy and future direction of the country were at the forefront of many people’s minds. 

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In any case, the next few months are poised to provide a lot more insight than the last few months about what the next year is likely to look like on an economic front, and we’ll return to assess the additional data as it arrives. 

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Editor's Note: This report is based on survey data from April 2024 that was published in May 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

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The US job market underperformed expectations for new job creation last month, adding only 175 thousand new jobs relative to the 240 thousand jobs that economists had predicted.

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Further, while the unemployment rate increased slightly to 3.9%, the actual month-to-month change was even smaller than it seems and was amplified by the customary rounding of the headline figure to one decimal place.

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While we have at many times touted the now 27 consecutive months that the unemployment rate has been below 4%, which represents a historically low rate maintained for a historically long time, a perhaps comparably impressive figure that is emerging is the 9 months in a row that the unemployment rate has rounded to within one-tenth of a percent of 3.8%, which is impressively consistent, a well.

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The healthcare industry recorded the largest number of new jobs last month, at 56 thousand, which is down slightly from an average of 63 thousand each of the last 12 months, while the social assistance industry grew by 31 thousand jobs - almost 50% higher than the average 21 thousand social assistance jobs added each month over the last year.

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The retail and transportation & warehousing industries both added about 20 thousand jobs, while construction and government payroll entries grew by about 8,500 jobs apiece.

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There was no meaningful change in jobs figures across the other major industries last month, including non-farm natural resource extraction industries, manufacturing, wholesale, information, financial services, professional & business services, and other services. 

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And it may be worth highlighting that while there was no significant change in leisure and hospitality employment figures last month, revisions from previously reported figures indicate that the leisure and hospitality has not yet in fact returned to pre-pandemic employment levels, so that milestone awaits ahead yet contrary to earlier reporting.

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The average workweek also decreased by 6 minutes to 34.3 hours per week last month while average hourly pay rose by two-tenths of a percentage point (or 7 cents) to $34.75 per hour. For private-sector non-supervisor employees, hourly pay rose last month by 6 cents per hour, up to $29.83.

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Mployer Advisor’s Take

Headlines may largely emphasize that job additions didn’t meet expectations, but it is important to consider those expectations in light of the relevant (and relative) context.

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Relative to the approximate 220 thousand jobs added each month on average throughout 2023, for example, the jobs numbers recorded last month are a bit down. 

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Relative to the more than 400 thousand jobs that the US economy added each month in 2022, however, the 175 thousand jobs added last month look a whole lot worse.

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Compared to the fewer than average 170 thousand jobs added each month in 2019 before the pandemic set in, however, or the 125 thousand new jobs added to the US economy on average each month for the 80 years before that - then last month’s 175 thousand new jobs starts to look a lot better. 

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Expectations and outcomes can have a funny relationship like that, which is mirrored in some of the market behavior we’ve seen recently. 

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When inflation numbers crept up again as of the most recent data, for example, the Federal Reserve not only chose to forego rate cuts at its latest gathering, but Fed leadership also took the opportunity to tamp down much hope for rate cuts at all in 2024, and the markets slumped as a result. Today, on the other hand, when the job additions failed to meet expectations, the markets again surged.

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Relativity aside, whether the job market continues to soften over the next couple months remains to be seen, of course, but with job openings currently at their low point over the last 3 years and with no interest rate relief in sight, a continued softening certainly seems more likely than not.

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At this point, however, consistency remains the most noteworthy and supportable trend in the data, and it is important to not lose sight of the fact that the job report remains significantly stronger than average, even if fewer jobs were added than expected.

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Check out the Mployer Advisor blog here.

‍Each month, Mployer Advisor collects and presents some of the most relevant and most pressing recent changes in law, compliance, and policy in areas related to employee benefits, health care, and human resources. 

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2023 EEO-1 Component 1 Submissions Due Date Set

Collection of EE0-1 Component 1 data will open on April 30, 2024 - with a final deadline for EEO-1 Component 1 submissions currently set for June 4, 2024.

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Check the Equal Opportunity Employment Commission (EEOC) website for updates as well as an instruction booklet and file submission specifications, which the EEOC expects to have posted by March 19, 2024. 

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This filing must be submitted by every company that has 100 or more employees across all locations and/or is affiliated with a company that has 100 or more employees through common ownership or centralized management. 

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Further, this filing must also be submitted by any company with 50 employees or more that has a contract with the federal government worth at least $50,000 or has an establishment that holds a federal contract worth at least $50,000. 

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Companies or establishments thereof that are federal contractors and serve as depositories of federal funds no matter how much or how little, as well as financial entities that are issuing and paying agents for US Savings Bonds and Savings notes must also submit this form. 

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Updates regarding the timely, etc. will be posted here on the EEO-1 website.

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New Notice Requirements For (Re-)Enrolling Certain Policies

A new federal rule addressing short-term limited duration insurance and independent non-coordinated benefits like fixed indemnity and specific-disease or illness policies was published on April 3, 2024. 

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The new rule is the result of a joint effort between several federal agencies and includes a requirement that the first page of any materials marketing application enrollment and re-enrollment must include notice to potential and current policyholders that the policy does not provide comprehensive benefits. 

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This notice requirement takes effect for applicable policies issued or renewed after January 1, 2025. 

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You can find that new rule here. 

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Supreme Court Sides With Employee In Title VII Discrimination Interpretation

The case at issue involved a male employee replacing a female employee who was transferred to a new department where her pay and title remained the same but her scope of duties, schedule, and some job perks did not.

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The Court held that a job transfer did not need to have caused ‘significant’ harm to an employee in order for the employer to have violated Title VII.

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A customizable example notice is provided in the rule as well to assist employers with compliance, although regulators intend to supplement that example with a template notice that would require no customization on the part of employers in order to satisfy the rule. 

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Federal Prescription Data Reporting Updates

RxDC reports for calendar year 2023 are due June 3, 2024 in accordance with the Title II, Division BB of the Consolidated Appropriations Act of 2021.

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While this information is usually submitted by carriers, pharmacy benefits managers, and third party admins - these entities will often need to seek out information directly from employers and can be expected to do so as the submission deadline approaches.

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Some of the noteworthy updates to this year’s submission instructions include:

• Clarification that nutritional supplements,over-the-counter medication, and medical devices are not to be included on lists of prescription drugs;
• Simplification of the total monthly premium calculation, now computed by dividing the total annual premium by twelve;
• Simplification of premiums calculation accounting for paid claims instead of incurred claims;
• Addition of a new column to input enrollment data; and
• Instructions on how to submit large data files that exceed the maximum allowable limit, as well as updated instructions on how to input various other data;

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Click here for the Centers for Medicare and Medicaid Services 2023 instruction guide for RxDC submissions.

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Pregnant Workers Fairness Act Update

The final regulations in support of the Pregnant Workers Fairness Act (PWFA) have been published and go into effect on June 18, 2024.

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Some of the accommodations that the final rule presumes to be reasonable absent an especially significant justification for denying the accommodation, including allowing pregnant employees to: 

• Take breaks to eat and drink;
• Keep water nearby;
• Use the restroom as needed; and
• Sit or stand as needed

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The rule also places a number of limitations for when employers can require supporting documentation in order for employees to request or receive accommodations under the rule, allowing employers to request such documentation only when it is reasonable under the circumstances.

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The final rule also requires accommodations for medical appointments, and defines certain terms broadly enough to require accommodations for medical care involving fertility, contraception, and situations when pregnancies abruptly end whether willfully or not. 

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You can find the final rule here.

The average US employee costs their employer about $45.42 per hour in total compensation expenses, excluding members of the armed forces. A little less than 70% ($31.29) of that total compensation was earned in salary and/or wages while a little more than 30% ($14.13) of that expense covered employee benefits and perks according to the BLS.

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Benefits and perks cross a number of segments. Below is the full breakdown but as you can imagine, the majority comes from medical, social security, leave, and retirement. While life, disability, dental and vision are all important, the only represent a small percentage of the full medical.

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Employers each year invest over $1T into their employee's benefits, this is over 5% of the US GDP. Your firm does the same, employee benefits are often one of the top five expenses each year for an employer, in some industries it is in the top three.

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Going one level deeper, the average hourly wage/salary costs were nearly identical between service employees and goods producing employees at $30.34 and $30.31 hours, respectively, whereas the average hourly employee benefits expense was a couple dollars higher for goods-producing employees at $14.44 an hour per employee than for service employees at $12.44 an hour per employee.

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Expenses derived from leave, however, whether paid time off or sick leave, were slightly higher for the service industries at $3.34 per hour relative to the $2.82 per hour average leave expense for employees in industries that produce goods.

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Employee Compensation Costs by Industry

First, lets take a look by industry. As the following chart illustrates, the information industry had both the largest wage/salary expense at $48.25 per hour and the largest employee benefits expense at $26.60 per hour, for an average total compensation expense of $74.85 per employee per hour.

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Despite paying a slightly lower average wage/salary expenses per employee at $47.95 than the information industry’s $48.25, the utilities industry nonetheless has the highest average hourly total employee compensation expense at $76.91 as a result of boasting the largest average hourly employee benefits expense of $28.96.

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The other services industry had the lowest average total employee compensation costs of just $17.82, followed by leisure and hospitality at $19.44, and the retail industry at $25.08 before making the jump up to the manufacturing industry, which spends an average of $43.68 on employee compensation per hour.

Interestingly, despite paying the lowest wages and salaries, the other services, leisure and hospitality, and retail industries pay the largest proportion of total employee compensation in the form of wages and salaries. In short, the pay is relatively bad in these industries and the benefits are even relatively worse.

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Employee Benefit Expense Breakdown

As noted above, the split between wages/salary expenses and employee benefits expenses was about 70% to 30%.

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The 30% of total employee compensation expenses that went toward employee benefits can be further broken down, the largest portion of which went to health insurance of course, which cost private employers about $2.94 per hour per employee on average.

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Social Security contributions were the next largest expense at $2.06 per employee per hour, followed by paid leave at $1.67, non-production bonuses at $1.20, and defined contribution benefits which cost employers an average of $1.07 per employee per hour in 2023.

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Those 5 employee benefit expenses alone (totally $8.97 per employee/hour) accounted for more than 70% of the average total hourly employee compensation expense of $12.77 per hour.

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The least expensive eight benefits expenditures combined to equal a little more than $1 in total cost per employee per hour, or a bit over 8% of the total average employee benefits expense.

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While the list stacks up for the minor benefit offerings, with a negligible impact on cost. some of them are the most important to certain segments of employees. As noted above, the split between wages/salary expenses and employee benefits expenses was about 70% to 30%.

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Employee Compensation Costs by Occupation Type

Next, lets look at the specific occupation. While workers in private industry cost their employers $43.11 per hour in total compensation expenses, those figures unsurprisingly varied quite significantly based on occupation type.

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Management, business, and financial occupations had the highest average hourly compensation costs at $81.72, followed by professional and related occupations at $66.53.

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Construction, fishing, farming, and forestry employees cost their employers an average of about $44.50 per hour in compensation expenses, while sales, transportation, and office and administrative employees had an average compensation expense of about $33 per hour. Service industry employees came in at the bottom of the list costing just $21.55 per hour in total compensation.

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It is worth noting that the benefits expenses incurred for sales employees is surpassed by all other occupations outside service occupations, and although sales occupations pay higher wages and salaries than transportation and office/administrative jobs, transportation and office/administrative jobs are nonetheless more expensive in total compensation because of their relatively more substantial benefits offerings.

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Employee Compensation Costs by Industry & Occupation

When accounting for both industry and occupation type at the same time, the combined effect that these independent factors have on average employee compensation expenses can be seen even more clearly, as in the following charts outlining employee compensation costs by industry, further broken down by occupation type.

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For example, management, business, and financial jobs in the professional and business services industry cost their employers ($89.79 per hour) more than $12 more an hour in total compensation expenses than employees in the same field that work in the manufacturing industry ($77.56 per hour).

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On the other hand, office and administrative support jobs compensation expenses were slightly more expensive in the manufacturing industry, albeit largely consistent across industries - $34.4 per hour in the manufacturing industry, $32.31 in the professional and business services industry, and $32.38 per hour in the trade, transportation, and utilities industries.

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In a future installment, we’ll take a look at how these employee compensation expenses also vary by company size and region as well as how occupation and employee headcount combine to affect average hourly employee compensation cost.

‍Editor's Note: This report is based on survey data from March 2024 that was published in April 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

The national unemployment rate average fell by one-tenth of a point last month, as US employers added more than 300 thousand new jobs.

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Only 6 states recorded a statistically meaningful reduction in unemployment rate, however, led by Arizona at minus 0.3%. 

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Florida was the only state to register an increase in unemployment last month, while the remaining 43 states and Washington DC saw no meaningful change in their month-to-month unemployment figures. 

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Similarly, only 5 states saw a net increase in jobs over the month, led by Virginia which added almost 17 thousand new entries to in-state payrolls, while the remaining 45 states and DC essentially held steady on net.

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There are 5 states plus Washington DC that have unemployment rates above the US national average, down from 6 such states last month plus DC, while 24 states boast unemployment rates below the national average.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for April 2024.

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States With the Highest Unemployment Rates

California posted the highest unemployment rate for the second month in a row, holding steady at 5.3%, followed by Washington DC which ticked up a tenth of a point to 5.2% and swapping places with Nevada who ticked down a tenth of a point to 5.1%.

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Rounding out the only other states with unemployment rates higher than the US average are Illinois, New Jersey, and Washington state - which each came in at 3.8% unemployment last month.

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Florida, which saw its unemployment rate go up by one-tenth of a point, was the only state to record a statistically significant increase in unemployment last month.

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Over the past 12 months, 29 states have recorded meaningful increases in unemployment, led by Rhode Island at plus 1.3%, followed by Connecticut at plus 1.1%, which were the only states that saw their unemployment rates increase by 1% or more over the year.

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States With The Lowest Unemployment Rates

For the third straight month, North Dakota and South Dakota recorded the lowest unemployment rates among the states, both holding steady over the month at 2.0% and 2.1%, respectively.

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Vermont was next on the list at 2.2% unemployment, followed by Maryland and Nebraska at 2.5% each.

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Of the 6 states that recorded a net drop in unemployment rate last month, all but Arizona at minus 0.3% recorded a reduction of just one-tenth of a point. Those states are Maine, Montana, New York, Vermont, and Virginia. 

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Massachusetts saw its unemployment rate decrease by one-tenth of a percent over the course of the last 12 months, and it was in fact the only state to record a net decrease in unemployment over that time frame.

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States With New Job Losses

No states saw statistically significant job losses last month.

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States With New Job Gains

5 states in total saw the total number of jobs being worked in their states increase last month.

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As a percentage, Arkansas and Kentucky saw the largest job gains at plus half a percentage point each, while Kansas and Virginia both registered 0.4% increases, rounded out by the 0.3% increase in Georgia.

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Looking at the raw number of jobs added, however, Virginia had the biggest month, growing their in-state payrolls by 16,500. For context, that’s 10 thousand more jobs over the month than what Arkansas added. 

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Over the last 12 months, Idaho has seen the largest jobs gain in terms of percentage, with a 3.7% increase in payroll entries over the past year. Nevada isn’t far behind with a 3.4% increase over the same time period. 

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Mployer Advisor’s Take: 

On the one hand, annualized inflation of 3.5% - as was recorded last month - is lower than inflation has been in all but 6 months out of the past 3 years.

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On the other hand, inflation has ticked upward (albeit slightly) now 3 out of the last 4 months. 

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The latter trend is what Fed head Jerome Powell is pointing to while signaling that they will likely be delaying the planned interest rate decreases until 2025.

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Perhaps even more concerning, Powell indicated that the Fed’s analysis shows that the cause of the lingering inflation may be linked to the increasing difficulty of insuring an economy that is being subjected to increasingly volatile forces, particularly with regard to natural disasters and weather related events.

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We will dive further into the new outlook on how uninsurability may be driving inflation in future pieces and what it means, but suffice it to say for now, given the potential scope of the problem that Powell believes has prevented inflation from being tamped out thus far, plans for lower interest rates may as well be on hold indefinitely.

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‍Editor's Note: This report is based on survey data from March 2024 that was published in April 2024. This is the most recent data available. (Source: Bureau of Labor Statistics)

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US employers had another banner month on the hiring front, adding 303 thousand new jobs, while the unemployment rate ticked back down a tenth of a point to 3.8%.

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Not only did these job figures exceed expectations, they did so by more than 50% over the approximate 200 thousand jobs that economists were forecasting. 

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It’s also worth noting that this report marks the 26th consecutive report with the US average unemployment rate below 4% - which is the longest such streak in nearly half a century.

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The healthcare industry saw the largest number of new jobs added last month, with 72 thousand new payroll entries, which is a 20% increase over the 60 thousand new jobs the healthcare industry has averaged over the last 12 months. 

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Government jobs had the next largest increase adding 71 thousand new jobs, which was up by more than 30% above its 54 thousand average monthly job additions.

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The construction industry also added a significant number of jobs at plus 39 thousand, which is more than two times its monthly average - a trend that was matched by the other services industry, which added 16 thousand jobs last month, doubling the monthly average it has recorded over the past year.

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While the social assistance industry saw growth as well, the pace was much slower than usual with the addition of just 9 thousand new jobs last month relative to its monthly average of 22 thousand. 

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Perhaps most noteworthy of all the industries that recorded job growth last month, however, is the leisure & hospitality industry, which added 49 thousand jobs last month, beating its 12 month average of 37 thousand, and now finally fully recouping all the jobs the industry lost during the peak of the initial pandemic -4 years in h making.

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There was no significant change in employment figures last month in the manufacturing, wholesale, transportation & warehousing, information, finance, professional & business services, mining, natural gas extraction, and quarrying industries.

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Average hourly earnings rose by 12 cents to $34.69 last month, which is an increase of three-tenths of a percent. When accounting only for private sector, non-supervisory employees, however, the increase was only 7 cents per hour, bringing the average hourly earnings for this subset of the workforce up to $29.79.

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The average workweek increased by one-tenth of an hour to 34.4 hours per week.

Mployer Advisor’s Take

Despite this significant job growth including a net upward revision of more than 20 thousand more jobs than were previously reported in January and February, the wage growth remains relatively slow and stable, which will help keep at bay some of concerns about what these strong economic reports will mean for the interest rate cuts that are expected before the end of the year.

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This kind of dynamic of job growth without the corresponding wage growth is only possible because of the entrance (or reentrance) into the job market of more than 400 thousand people last month, bringing the labor participation rate up two-tenths of a point to 62.7%.

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Still, the strength of this report undoubtedly increases the likelihood that the three interest rate cuts that the Federal Reserve has penciled in for 2024 will fall in the second half of the year, and any similarly strong reports that come over the next few months may very well push at least one of those cuts into 2025. 

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With prices increasing by a very historically reasonable 3.2% (albeit still above the Fed’s target of 2%) as of the most recent data available, continued strong job growth is a lot more likely to delay and/or decrease the forthcoming rate cuts than another flare up in inflation seems to be, which is a pretty great place for this economy to be in, all things considered

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