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Jobs Report Tells Simple American Narrative: You're Struggling

Tickers in this article: DIA SPY

NEW YORK ( TheStreet) -- The latest jobs report exposed a simple American narrative: economic conditions are improving, but middle class Americans are struggling.

The Labor Department reported Friday that nonfarm payrolls in May increased by 217,000 while the unemployment rate stayed at 6.3%, but a glance at the numbers shoved inside revealed OK wage growth and below-average improvement in manufacturing and construction.

A deeper dive in the report shows that hourly wages increased 2.1% year-over-year, which was 0.1 percentage point better than what economists expected. Unfortunately, this wage growth isn't enough for U.S. workers.

"The yearly growth rate for wages still doesn't impress very much," Ben Garber, an economist at Moody's Analytics said in an interview . "At this point in the recovery you want it close to 3%, 4%; it's not really showing a great tightness in the labor market, it's not pressuring prices higher, so there's still a lot of slack in the economy."

The bulk of the jobs added came from private services, according to data compiled by FAO Economics chief economist Robert Brusca, who broke out the percentile of a handful of job categories to give context of how well each sector performed during May relative to every other month since the economy began posting employment increases in October 2010.

Manufacturing and construction underperformed in May, posting their 26th best and 23rd best months in the recovery, respectively, according to Brusca's data. By percentile that means May construction job growth was in the 41st percentile while manufacturing was in the 48th percentile.

Overall, this was the 13th best month for total payrolls added.

Despite the four straight months of 200,000 plus jobs created and the return this month of all jobs lost in the Great Recession, full time work as a percentage of all jobs in the labor market sits at just below 82%, which is still below the 83.5% share workers enjoyed in late-2007.

"When you consider that here's the [ Federal Reserve ] chairman saying that U-6 is the measure of real unemployment right now, that's just really scary," Paul Sobrera, president of executive search firm Alliance Consulting, said in a phone interview from New York.

Sobrera was referring to Fed Chairman Janet Yellen's remarks on March 19 that the central bank is watching the U-6 measure of unemployment (which includes all people marginally attached to the work force, part time and the traditional unemployed) as one of a broad number of indicators to gauge the health of the economy.

U-6 unemployment currently is 12.2%.

While Wall Street and Main Street would cheer four consecutive months of more than 200,000 jobs added during any other growth cycle (it hasn't happened since 1999-2000), this one comes at the ever growing tail end of the recovery born from the 2008 financial crisis.