The U.S. economy added 390,000 jobs in May, better than expected despite fears of an economic slowdown and a roaring inflation rate, the Bureau of Labor Statistics reported on Friday.
At the same time, the unemployment rate remained at 3.6%, just above the lowest level since December 1969.
Economists surveyed by the Dow Jones had been looking for non-farm payrolls to increase by 328,000 and the unemployment rate to drop to 3.5%.
“Despite the slight cooling, the tight labor market is clearly staying afloat and not afraid of a recession,” said Daniel Zhao, a senior economist at Glassdoor. “We continue to see signs of a healthy and competitive job market, with no signs of slowing down yet.”
Average hourly earnings rose 0.3% from April, slightly lower than the 0.4% estimate. The year-on-year increase in wages of 5.2% has been in line with expectations.
Stock market futures were volatile and pointed to a lower opening on Wall Street after the report. Public bond yields increased.
Labor earnings were broad-based. Leisure and hospitality led, adding 84,000 places. Professional and business services increased by 75,000, transportation and storage contributed by 47,000, and construction jobs increased by 36,000.
Other areas that saw significant gains included state government education (36,000), private education (33,000), health care (28,000), manufacturing (18,000), and wholesale (14,000).
However, the retail trade was successful during the month, losing 61,000 in May, although the BLS noted that the sector remains at 159,000 above its pre-pandemic level of February 2020.
Despite earnings, the BLS household survey showed that the labor market has not yet regained all the positions lost during the pandemic. Total employment remains 440,000 below the previous Covid level.
The share in the active population increased to 62.3%, although still 1.1 percentage points below February 2020, as the active population is 207,000 people lower than this mark.
A more global measure of unemployment that takes into account those who are not looking for work and those who work part-time for economic reasons rose to 7.1%, one tenth more than in April. Unemployment among Asians fell to 2.4%, the lowest in almost three years, while the rate for Blacks was 6.2%, up 0.3 percentage points.
Revisions to the March and April job estimates reduced the total reported above by 22,000.
The report comes amid fears that higher inflation, along with geopolitical developments, including the Ukrainian war and Covid’s restrictions on China, could affect a shrinking U.S. economy. 1.5% in the first quarter.
Although there have been recent indications that inflation may be slowing, the current pace is still the fastest in 40 years. Pump prices are specifically at record highs, with a gallon of unleaded regular at $ 4.76, up 13% from a month ago and up from 56% a year ago, according to AAA.
This comes with a slowdown in the economy which is currently on track to grow at a rate of only 1.3% in the second quarter, according to the Federal Reserve.
In an effort to control inflation, the Fed is trying to curb the economy with a series of interest rate hikes. Fed Governor Lael Brainard told CNBC on Thursday that she expects further increases in the coming months until inflation falls to the central bank’s 2% target.
Companies have been hampered by the current environment, mainly due to the shortage of workers, which has left almost two jobs for every available worker. A Fed report earlier this week said companies were expressing growing concern about the future outlook: eight of the 12 central bank districts reported a slowdown in growth, while four specifically cited fears of recession .
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