Some Jobs Data Indicate a Slower Economy in May --- Though Unemployment Fell To 7.5%, Average Hours, Earnings Also Declined
WASHINGTON -- Although the unemployment rate dropped sharply in May, employment statistics for the month indicate the economy was growing much more slowly than in April.</br></br>Civilian unemployment fell to 7.5% of the work force in May after sticking at 7.8% in March and April, the Labor Department said. A separate measure, which includes members of the military among the employed, dropped to 7.4% in May from 7.7%.</br></br>The drop returned the jobless rate to its level of November 1980, when Ronald Reagan was elected president. Any further declines in the coming months will enable the president to claim during his reelection campaign that his administration brought down both inflation and unemployment.</br></br>But the decline of the unemployment rate is more a reflection of the economy's previous strength than of its strength in May. While employment rose sharply during the month, the number of hours worked by the average employee declined from the unusually high level of April, and average earnings also declined. That suggests industrial production and personal income rose modestly in May, if at all.</br></br>"We just exchanged bodies for hours," said Donald Ratajczak, director of the economic forecasting project at Georgia State University. "May was a standstill month. In real GNP (gross national product), we are talking no change."