Notes on the Latest  US Jobs Report

Dean Baker

 June 9, 2026

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Photo by Hennie Stander

Last year the major anomaly in the labor market seemed to be that we were seeing very weak job growth and only a limited rise in the unemployment rate. The most plausible explanation was that the Trump administration’s immigration policies had sharply curtailed the pace of labor force growth, with the number of jobs needed to keep the unemployment rate stable now in the range of 20K to 60K.

In the last three months we seem to be seeing the opposite story. The economy added 172,000 jobs in May, after adding 214,000 jobs in March and 179,000 in April, for an average of 188,000 jobs a month — yet the unemployment rate has remained unchanged at 4.3 percent. The household survey actually shows a modest loss in employment of 141,000 over these three months.

The establishment survey is much larger and less erratic, so it is likely giving us a better picture of the state of the labor market. Nonetheless, the disparity in the surveys is striking.

Health Care, Local Government, and Leisure and Hospitality are Big Job Gainers

The health care and social services sector continued to be a big job gainer, adding 47,200 jobs. Local governments had a surge of 55,000 new jobs, the largest gain since March of 2024. Most of these jobs — 43,500 — were not in education, which lessens concern over seasonal adjustment issues. The leisure and hospitality sector added 70,000 jobs, with 48,000 of these coming in restaurants. These three sectors together accounted for all the job growth in May.

Job Growth in the Goods Sector Remains Weak

There was some limited growth in all three components of the goods sector. The logging and mining sector added 4,000 jobs, 3,100 of which were the support activities for mining, which is primarily the oil and gas industry. Employment in the sector is still down by 5K from the year-ago level. The surge in oil and gas prices is an inducement to increased drilling, but the gains will be limited if the industry does not believe prices will remain high.

Construction added 17,000 jobs, somewhat better than its average of just 6,000 per month over the last year. Manufacturing added 7,000 jobs, its fourth gain in the last five months, after losing jobs all through 2025. Employment in the sector is still 46K below the year ago level.

Air Travel and Insurance Shed Jobs

The airline industry lost 8,700 jobs in May, 1.5 percent of total employment. This is fallout from the war-related jump in fuel prices. The insurance industry was also a job loser, shedding 10,700 jobs, after losing 7,800 jobs in April. Employment is down 72,900 (2.4 percent) from its year-ago level. This could plausibly be the impact of AI.

The professional and business services category added just 6,000 jobs, despite the big jump in job openings in the sector reported in the April JOLTS. Retail lost 1,100 jobs after adding 23,500 in April. Employment is up just 17,900 over the last year.

The motion picture industry lost another 2,700 jobs. Employment is down 127,900 (28.0 percent) from its peak in November of 2022.

Wage Growth Slows to 3.4 Percent

Despite the uptick in employment, the growth in the hourly wage slowed further to just 3.4 percent. This is down from a rate of just over 4.0 percent in 2023-2024. With inflation now running at close to a 4.0 percent rate, wages are no longer keeping pace with inflation.

Wages for lower paid workers seem to be doing slightly better. Wages for non-supervisory workers rose 3.6 percent over the last year and in the low-paid restaurant sector they rose 4.4 percent.

Household Survey Shows a Mixed Story

In addition to the stable unemployment rate, the employment-to-population ratio (EPOP) edged up to just 59.2 percent, still 0.1 percentage point (p.p.) below its February level and 0.5 p.p. below its year-ago level. With baby boomers retiring in large numbers, some fall in the EPOP might be expected, but 0.5 percent is larger than can be explained this way.

There is a better story for prime-aged workers (ages 25 to 54). Their EPOP edged up 80.8 percent, 0.3 p.p. above the year-ago level and just 0.1 p.p. below the peak for the recovery hit in several months in 2023 and 2024.

Unemployment Rate for Black Workers Falls to 6.6 Percent

The unemployment rate for Black workers had increased sharply in 2025, peaking at 8.2 percent in November. It has fallen back substantially in the last half year, with the 6.6 percent rate just 0.4 p.p. above the January 2025 level. Still, this is a 1.8 p.p. rise from the low hit in April of 2023. The EPOP for Black workers, at 57.9 percent, is down 0.8 p.p. from the January level and 2.8 p.p. from the peak in March of 2023.

Duration Measures of Unemployment All Rise

Perhaps the most negative item in the household survey was the rise in the duration of unemployment spells. The average duration rose by 1.6 weeks to 26.0 weeks, up from 21.9 weeks a year ago. The median duration rose by 0.6 weeks to 11.6 weeks, compared to 9.5 weeks a year ago. The share of long-term unemployed (more than 26 weeks) rose to 27.5 percent, up from 20.4 percent a year ago. Clearly people who lose a job are finding it harder to get a new one.

Going the other way, the share of unemployment due to quits rose to 12.5 percent, up from 11.3 percent in April. But given the 4.3 percent unemployment rate we would expect the share due to quits to be over 14.0 percent.

Mostly Positive Report with Some Serious Anomalies

It’s hard to complain about a jobs report showing a gain of 172K jobs following two previous months of strong gains. Still there are some serious items that provide serious grounds for concern. The most important is the gap with the household survey. This does happen, so it is not especially alarming, but still it is striking to see three months of job growth that is surely far above the breakeven rate and no decline in the unemployment rate.

The other major anomaly is the weakness of wage growth. We should be seeing a tightening of the labor market, and the higher inflation should mean that workers expect larger wage increases. But wage growth is slowing. It’s not clear what this is saying about the labor market, but it clearly means many workers are falling behind.

The concentration of job growth in three sectors is also a bit concerning. Health care is likely to continue to show strong growth given the aging of the population, but that is not likely to be the case with local governments. And the growth in restaurant employment seems inconsistent with the recent retail data.

Nonetheless, the overall picture still looks positive, but that could change if the war continues and oil prices stay high.

This first appeared on Dean Baker’s Beat the Press blog.

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC. 

What Is El Nino And How Will It Affect Asia? – Analysis

June 7, 2026 
By P. K. Balachandran


El Nino is a periodic disturbance in the Eastern Pacific Ocean off South America, but its effects are felt acutely in many parts of the world, including Asia

On June 3, Sri Lanka’s Meteorological Department issued a warning about drought in the island during July and August this year due to El Nino. El Nino is a weather condition originating in the equatorial Pacific Ocean off South America. But it is so big that it affects the weather all over the world including Asia.

El Nino has an 80% chance of forming before September and a 90% chance before November, the World Meteorological Organization (WMO) said last week. Asia is predicted to be one of the regions most exposed, with intensifying heat and drought predicted to put major stresses on agriculture, power grids and water supplies.

What is El Nino

El Nino is a natural weather fluctuation, not directly caused by climate change or global warming. Essentially, it is a short-term alteration of atmospheric pressure and wind patterns, which shifts rainfall belts and causes extreme weather events worldwide.

El Niño means the “Little Boy”, or “Christ Child” in Spanish. It was first noticed in the 1600s by Spanish fishermen off the coast of South America near Peru and Ecuador. It was so named because it typically occurred around Christmas.

The weather depends a lot on ocean temperatures. Where the ocean is warm, more clouds form, and more rain falls in that part of the world. In the Pacific Ocean, near the equator, the sun makes the water especially warm on the surface in December and El Nino follows.

Normally, the trade winds blow from East to West, pushing the warm surface waters of the Pacific Ocean towards Indonesia and the Western Pacific. This process creates a pool of warm water in the Western Pacific and a cooler pool in the Eastern Pacific near South America. But during El Nino, something different happens. The trade winds weaken, or may even reverse, causing the warm surface waters to flow back eastward towards South America instead of going to Indonesia! As a result, the eastern Pacific becomes unusually warm.

Due to the heat, many fish that live in the normally cooler waters off the coast of South America move away or die. When El Nino happens, lots of rain clouds form over the warm part of the ocean. These clouds then move inland and dump a lot of rain in South and Central America and in the United States.

Meanwhile, weather patterns all over the world may take an unusual turn. Some places may see draughtand others may see floods and storms.

Impact on India

According to “The Guardian”, the core concern is that El Nino might intensify heat conditions and weaken the oncoming monsoon, the months of heavy rain that come every year around June, which is already predicted to deliver “below average” rainfall. That would be disastrous for India and the wider subcontinent, which has already been grappling with deadly heatwaves, and an energy crisis due to the crisis in the Middle East.

A shortage of rains would prove particularly devastating for farmers, who rely on the rains for their next crop planting season. The heatwave in May has already caused damage to wheat and mustard crops and it is feared El Niño could worsen drought conditions and have a worrying effect on food security in the country.

Farmers across India are already worried about an impending shortage of fertiliser for planting, due to the Middle East crisis.

El Niño could also have severe consequences for India’s cities, most Mumbai which relies solely on seven rain-fed lakes to provide water for its more than 22 million inhabitants. The lakes currently only have 45 days of water left, and if the monsoon rainfall is delayed in El Niño conditions, Mumbai could find itself facing a significant water crisis, “The Guardian” warned.

Impact on China

China often suffers from flooding as well as droughts in the summer months. This year the challenges will be bigger as El Niño is set to cause further havoc.

On Friday, the National Climate Centre said El Niño’s effects would peak in autumn and winter, and that it could lead to increased rainfall in southern China and higher temperatures across the country. Rainfall in some parts is expected to be 20% higher than average this year, according to “Xinhua”.

Certain parts of China are expected to experience extremely heavy rainfall this week, with some areas of southern and eastern China set to see more than 200 mm of rain. Parts of Hubei province have been particularly badly hit.

Impact on South East Asia

El Nino will make South-East Asian countries vulnerable to surging temperatures that jeopardise public health, overwhelm electrical grids, and rapidly deplete vital water reserves. Countries that depend heavily on agriculture, like Indonesia, Malaysia, Thailand, and the Philippines are particularly vulnerable.

The region is already in the midst of energy and fertiliser shortages due to the Middle East crisis and has had to turn increasingly to dirty fuels to cover the shortfall, “The Guardian” said.

Parched soils could threaten staples, particularly rice and palm oil, and spark food shortages and inflate market prices, dealing a heavy blow to local economies and threatening the nutritional security of lower-income households.

The region’s vital tourism sector could also be affected. Famed destinations from Bangkok to Da Nang are bracing for daytime temperatures climbing well past 40 degrees, rendering outdoor attractions, cultural sites, and beaches practically unusable during peak hours.

The dry spell could also ignite agricultural and peatland fires in places like Sumatra and Kalimantan. The resulting toxic smoke plumes could blanket financial and transit hubs like Singapore and Kuala Lumpur, “The Guardian” said.

Effects On Sri Lanka

According to the Acting Director General of Meteorology, Ajith Wijemanna, current forecasts indicate an over 82% probability of El Niño conditions developing in Sri Lanka in the coming months.

“If an El Niño condition develops, rainfall is expected to decrease significantly during July and August. We are likely to experience drought conditions during that period. Forecasts currently show more than an 82% probability of an El Niño event occurring during July and August,” Wijemanna told newsmen.

He noted that El Niño events typically last between 9 to 12 months, with impacts on Sri Lanka potentially continuing until early next year. “If such an El Niño event occurs, its effects could remain until around February next year,” he warned.

The Dry Zone in Sri Lanka may see a severe drought with reduced monsoon rains. Water for irrigation could be scarce. Crops like paddy, tea could be affected. Farmers in regions like Anuradhapura, Polonnaruwa, and Monaragala are particularly vulnerable to drought.

Since, Sri Lanka relies heavily on hydropower, reduced rainfall would mean lower water levels in major reservoirs like Castlereagh, Maussakelle, and Victoria. When these reservoirs run low, the ability to generate affordable electricity plummets, forcing reliance on more expensive and polluting thermal power.

El Nino can cause a drinking water shortage. Communities, especially those in rural areas, will face immense challenges in accessing clean water for domestic use.

Reduced agricultural output can drive up food prices, impacting household budgets across the country. Increased spending on thermal power generation would strain national finances, and the overall economic activity can slow down due to resource constraints.

Prolonged heatwaves due to El Nino can increase the risk of heatstroke, dehydration, and other heat-related illnesses. Water scarcity can also lead to poor sanitation and an increased risk of water-borne diseases.

Solutions

The website slbuilds.lk has given a list of do’s and don’ts during El Nino. Irrigation infrastructure should be improved, with leaks plugged. New water sources should be tapped. Development of new reservoirs should be undertaken. The Ministry of Agriculture should promote drought-resistant crops. Techniques like drip irrigation and precision agriculture should be promoted. Crop insurance schemes also help farmers recover from losses. Local government bodies and NGOs could urge the public to take to rainwater harvesting efficient water use practices

Steps could be taken to reduce reliance on hydropower, by going in for solar, wind and biomass. Rooftop solar power for homes and businesses, along with large-scale solar farms, should be promoted.

People should drink plenty of clean water, and keep Oral Rehydration Salts handy. They should avoid the midday sun, limit outdoor activities during the hottest parts of the day to prevent heatstroke. If water is to be stored, the containers should be clean and covered to prevent contamination.

More broadly, the overall eco-system of Sri Lanka should be preserved. Forests, wetlands, and coastal areas are natural defences against extreme weather and these should be protected.


About P. K. Balachandran

P. K. Balachandran is a senior Indian journalist working in Sri Lanka for local and international media and has been writing on South Asian issues for the past 21 years.

View all posts by P. K. Balachandran →

Saving the Planet Depends on Asia

John Feffer

 June 5, 2026

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A 50 MW photovoltaic solar power station built in Shanxi Province in 2017. Photograph Source: Planet Labs – CC BY-SA 4.0

Early adopters pay a premium for their embrace of innovation. If you bought one of the first electric cars in the United States, you had limited range, long charging times, and very little infrastructure to support you on anything but the shortest journeys. If you’d held out just a little bit longer, you could have spent a lot less money and gotten a lot more vehicle.

Foot-draggers, in other words, can reap a lot of benefits, whether as a result of ignorance (not knowing about a new product), fear (of making a mistake), or strategic patience. But too many foot-draggers could doom innovation.

Public policy is often designed to reward early adopters and light a fire underneath the foot-draggers. During the Biden years, EV buyers could receive a tax rebate, and the administration invested money into the expansion of charging stations. As a result, consumers rejiggered their cost-benefit analyses, and for a short period demand exceeded supply. As more companies went into the EV business, the United States, at least briefly, began to move away from the combustion engine.

The Paris Agreement was supposed to create an overall environment to shape such Green public policies. Unfortunately, the Paris targets were voluntary, which meant that countries could make grand statements of commitment while dragging their feet in reality. The ubiquity of “Green-dragging”—the slow-walking of carbon-reduction strategies—has produced the inevitable results: steadily increasing global emissions, the spiraling costs of loss and damage, and a general skepticism that international cooperation can ever really tackle a problem of such magnitude.

Then along came Donald Trump, who has proudly proclaimed his climate denialism. To the delight of the fossil fuel companies that poured money into his reelection campaign, the president has pledged to extract every bit of oil, gas, and coal from beneath the United States. He hasn’t stopped there. To gain access to every last scrap of extractable value in the world—Venezuela’s oil, Greenland’s minerals—Trump has engaged in truly reckless behavior.

In his riskiest move yet, the American president joined Israel in attacking Iran at the end of February. His rationales were many: to “solve” a problem that had bedeviled presidents going back to the hostage crisis of 1979, to punish the ayatollahs that have taunted him, to upend the politics of the Middle East. But he also dreamed of controlling Iranian fossil fuel assets.

Yet this poorly planned, fitfully executed, and shamelessly promoted campaign has backfired in more than one sense. Iran’s blockade of the Strait of Hormuz, which in turn prompted Trump to blockade the blockade, has boosted the price of oil at the pumps in the United States. And it has pushed countries all over the world to rethink their commitment to the fossil fuels that have been blockaded in the Persian Gulf. The fossil fuels that Trump wants to make more available have instead become more scarce.

Will the Iran war prove to be sufficient to shake the Green-draggers of the world out of their torpor? Much will depend on Asia.

What the War Has Done

Very few countries have insulated themselves from the energy shocks of the Iran War and the double blockade of the Straits of Hormuz. Poorer countries that rely on fossil fuel imports are the hardest hit: rolling blackouts in Bangladesh, fuel rationing in Myanmar, school closures in Pakistan. The rising cost of fertilizer—and the consequent reduction in global food supplies from such developments as the halving of this year’s Australian wheat harvest—will hit poor countries even harder.

You’d think that the countries that have pushed hard to transition to clean energy would be able to breathe easy despite the double blockade of the Strait of Hormuz. But that’s not been the case. Uruguay gets 99 percent of its electricity from renewables, but it still relies on a good deal of imported fossil fuels to supply almost 40 percent of its overall energy needs. Several European countries—Denmark, Portugal, The Netherlands, Lithuania, and Luxemburg, with Spain, Ireland, Germany, and Greece not far beyond—are approaching the magic goal of sourcing their electricity entirely from renewable sources, but they too continue to import considerable amounts of oil and gas for heating and other purposes.

Even countries that produce oil and gas in large quantities have been adversely affected by the war. The Gulf States have faced enormous difficulties getting their products to market—and have also suffered damage to their energy infrastructure from Iranian attacks. The United States, despite an abundance of oil, has seen a substantial increase of prices at the pump. Although it can be considered a “winner” of the Iran war because of the increased demand for its oil and gas, Russia’s windfall profits have been compromised by sanctions and Ukrainian drone strikes on key production and processing facilities.

Until recently, the countries that have dragged their feet in their exit from the fossil-fuel era were largely failing on the environmental front. They weren’t paying the upfront costs of preventing the planet from overheating, either because they didn’t sense the urgency of the situation or they wanted a free ride on an emissions-reduction bandwagon driven and paid for by others. It wasn’t because of outright denial of global warming. Other than the United States under Trump, it is hard to find a government that actively ignores the science of climate change. Still, such countries weren’t making the huge investments necessary—at home or as part of climate justice payments to the Global South—necessary to reduce emissions.

More recently, with the price of solar and wind power along with battery storage dropping precipitously, “Green-dragging” has been economically counterproductive as well. But inertia is a powerful force. An energy transition is more than just slapping a few panels on top of a parking lot or building a couple windmills on top of a mountain. Shifting away from fossil fuels requires a buildout of electricity infrastructure, the introduction of new fleets of electricity-powered public transportation, and the replacement of residential and business heating systems reliant on oil and gas. That not only costs money but requires strategic investments from motivated governments.

China showcases the push-pull dynamic of the energy transition. It has quickly transformed itself into a leader of the energy transition by pushing for adoption domestically—adding more solar capacity each year than the rest of the world combined—and grabbing 80 percent of the global market share for solar panels (as well as 60 percent of the wind turbines). It recently debuted an EV battery that can go for nearly 1,000 mileson a single charge that takes only about 6 seconds. This development alone will transform global transportation.

Yet China is also the biggest emitter of greenhouse gasses and remains heavily dependent on fossil fuel imports. In 2024, for example, China relied on fossil fuels for 86 percent of its energy supply. The country has one foot in the past and one in the future.

Japan is an equally stark example of a “Green-dragger.” To be sure, Japan was a pioneer in energy efficiency from the 1970s on. It was a leading innovator in the global environment movement for several decades. More recently, the government introduced a plan for Green industrialization. But the Iran War has revealed just how little progress the country has made in its energy transition and how domestic roadblocks continue to impede its progress.

The Price of Industrialization

Japan’s post-war economic miracle was fueled by imported fossil fuels. The country produces no natural gas and virtually no oil. Its coal production is negligible.

Not surprisingly, Japan is the second largest natural gas importer in the world (behind China), the third largest coal importer (behind China and India), and the fifth largest importer of oil. All of this imported dirty energy has pushed Japan into the number five position globally for its carbon emissions.

Environmentalism certainly exists in Japan. Thanks to the efforts of environmental movements, the air in Tokyo and other cities is no longer toxic. High-profile cases like the mercury poisoning in the coastal city of Minamata precipitated a campaign to clean up waterways. Japanese programs established some early environmental projects in China in the 1990s.

But change comes slowly to Japan, especially from the top down. Japanese governments have been willing to take risks on technology, but they have also been loath to embrace policies that could potentially disrupt the social fabric.

So, for instance, like the European Union and the United States under the Biden administration, Japan has committed to a government-led transition to clean energy. Its Green industrial plan—the GX Basic Policy—focuses on investments into batteries and semiconductors and is coordinating investments among nearly 750 companies. It recently launched an emissions trading system, Yet none of this will wean the country of its addiction to fossil fuels at anything close to the rate necessary to achieve rapid decarbonization.

Moreover, the country remains wildly optimistic about the ability of technology to compensate for its lack of resolve. For instance, it has invested heavily in “clean coal” technologies. But despite claims that carbon-capture methods or “coal-ammonia co-firing” will somehow make coal power more efficient or more palatable, the thinktank E3G concludes that “decades of ‘clean coal’ promotion have left coal technologies either high-emitting in the real world, or stuck in a perpetual planning phase.”

Ultimately, then, Japan is a serious Green-dragger. Its emissions are falling but not nearly enough to meet even the tepid targets of the Paris agreement. It is heavily committed to natural gas as a “transition fuel,” and that means building up fossil fuel infrastructure. One important development is indeed driving down energy use and emissions: the country’s declining population. But that’s not a development the government is going to promote.

The Costs of War

The Iran war could push the world in one of two directions: doubling down on clean energy or trying to exit the crisis the dirty way.

Much depends on Asia. The region is expected to account for much of the increase in oil and natural gas use in the coming years. It is also responsible for 84 percent of global coal-fired power. “If Asia turns around and says, ‘No, we’re not going to grow with fossil fuels, we are going to grow with electrotech,’ that means fossil fuels will peak, and will peak sooner than we think,” Daan Walter of the think tank Ember told Grist magazine.

Even if it continues to favor fossil fuels at home, China is ready to help the rest of the world move toward clean energy. Because of the Iran War, China finds itself in the enviable position of selling lemonade in a heatwave. As The New York Times reports, lots of countries are buying what China is selling: “Fifty countries, including Australia, India, Egypt and even the United States, have set monthly records for the highest Chinese solar imports.”

Japan, with its history of environmentalism, its embrace of industrial policy, and its track record of technological innovation, could lead the region down the clean-energy path. So far, that’s not happening. As a result of the Iran War, Japanese Prime Minister Takaichi Sanae has pledged to make Japan completely energy self-sufficient—not through a Green transition but with a nuclear step backward. The government has a tailwind on this issue. Over 40 percent of the population supports the restart of nuclear plants—versus around 25 percent against—which is quite the reversal 15 years after the Fukushima catastrophe.

Japan is not alone. China and South Korea are looking to beef up their nuclear sectors. Vietnam and the Philippines are looking into developing the sector.

Nuclear is neutral when it comes to carbon emissions, but it has dirty byproducts of its own (not to mention the risks of future Fukushimas). A case can be made to maintain current nuclear plants to provide energy in the interim while renewable systems are built out. But spending huge sums on new nuclear plants is a recipe for stranded assets.

Perhaps it’s naïve to believe that Japan could again be a leader in the region, this time on clean energy. South Korea has been generally more willing to take risks, such as pledging to phase out coal by 2040, but it too is basically a Green-dragger. Vietnam and India are rapidly adding renewable energy infrastructure, but they too remain heavily dependent on fossil fuels.

The region hasn’t yet adjusted to the new realities created by the Iran War. Countries in Asia, which will determine the future of fossil fuel use, must be a lot bolder. And someone has to take the lead. If conservative, risk-averse Japan responds to the wake-up call of the Iran War to accelerate dramatically its exit from the fossil fuel era, that could indeed inspire the rest of the region to follow suit.

And if that happens, the planet has a real chance to avoid the worst-case scenarios of climate change.

John Feffer is the director of Foreign Policy In Focus, where this article originally appeared.